Zero Hedge 
July 30, 2012
There are only three words that send a chill down the spine of Ben Bernanke – Ron, Paul, and Deflation. His life’s work is devoted to the avoidance-at-all-costs of the latter (and probably the former in reality). As we discussed here two weeks ago , his actions in extreme monetary policy have all occurred at periods when the market’s expectations of future rapid de- or dis-inflation have increased rapidly. As we noted then: without inflation break-evens dropping, the Bernanke put will not arrive; but the market in its infinitely efficient wisdom has created a self-defeating spiral of BTFD reflexive front-running on any rapid spike down in future inflation expectations – which implicitly sparks a non-dis-inflationary reaction and removes Bernanke’s punchbowl for another day.This has occurred 4 times this year – with this week’s early plunge being caught by Draghi and Hilsenrath – and with inflation break-evens almost at their highest in 10 months, it would appear the ‘desperate-not-to-miss-the-life-giving-rally’ market just removed its own blood supply.
Each time the inflation break-evens have cracked down hard towards 2.0%, Bernanke has stepped up bowl-in-hand and ladled out the yummy QE Kool-Aid; 2012 has seen 4 ‘mini-spikes’ which have all been triggers for responsive equity buying to front-run Ben’s-Bowl. But as is clear, the more this occurs, the less likely the bowl is to actually appear!