By William Pesek
The two men who mattered most in India last week made for an eclectic pair: Anna Hazare and Ben Bernanke.
No one can say how Hazare's anti-corruption campaign will ultimately pan out. The hunger strike staged by the self-styled Gandhian catalyzed millions to say "no more." It's now up to politicians in New Delhi to do as they've pledged and end graft.
Everyone, by contrast, knows where the Federal Reserve chairman's campaign in Washington is headed -- toward pumping ever-greater amounts of liquidity into the global financial system. And that's making Bernanke front-page news in Asia's third biggest economy.
At issue is the "Bernanke put," something about which traders in India are buzzing. It refers to the Fed chairman's predictable moves to stabilize markets when things get dicey. Yet there's a dark side for Asia, which is disproportionately on the receiving end of the Fed's largesse. India, where inflation is advancing faster than economic growth, is a case in point.
Last week, the Reserve Bank of India warned that the Fed's easy-money policies will stoke commodity prices and domestic inflation. It is struggling to contain the fastest inflation among major economies even after raising rates 11 times since mid-March 2010. Those hikes have been no match for the Fed's powerful monetary spigot.
The campaigns of Hazare and Bernanke appear to have little in common. Yet at the root of the groundswell of support for Hazare is this: hundreds of millions of Indians feel left behind. Much of that frustration stems from how corruption concentrates wealth among the privileged few, not the impoverished masses.
Inflation plays a big role here, too. The Indian central bank's repurchase rate is 8 percent, and yet wholesale-price inflation has stayed above 9 percent since December. Domestic food and oil prices are surging.
India is currently growing 7.8 percent. Making sure growth trickles down to all of the nation's 1.2 billion people means stamping out corruption. It also means keeping inflation from overwhelming households affected by the Bernanke put.
(William Pesek is a Bloomberg View columnist)-0- Aug/29/2011 14:55 GMT