I think it ruins their pride when problems are not explained with complexity. The Money Market Theorists want to have a complicated scheme to manage printing presses, Keynesians want to demonstrate their knowledge of mass psychology.
It is mostly nonsense, here is how it works in reality:
About a year and a half ago, OPEC decided to set the quantity of oil delivered to maintain an oil price of $75/barrel, measured in Dollars. They have been successful because the quantity they deliver for this price is reasonably stable and oil is the constrained resource in the American economy.
That is how OPEC sets our inflation rate and our dollar trade value, by setting oil imports. They also determine the efficiency of energy use because if energy is used inefficiently, the quantity supplied drops and the economy stalls. Nothing any American economist says will change that, except for methods to increase energy efficiency. It has been this way since Oct 2008 and will remain this way until one or more groups of nations obtain significantly higher energy efficiency through better technology.
There are no bond vigilantes because OPEC is performing the task for them. Remember, OPEC holds a huge swath of assets from oil importing nations and OPEC will protect its investment.
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