Ben Bernanke was sworn in yesterday, but he wasn't born yesterday. He knows how the central bank works. Or, at least he thinks he does. The secret, he believes, is in the plumbing. You have to keep the money flowing. And when things get a little sluggish, you have to open a few more valves and sluice gates.

Since he can only create "money" and not real wealth, the deeper secret - one that requires hip waders and a nose clip - is that a central banker must hoodwink the public into thinking it has more wealth than it really does. Consumers, investors, politicians, and businessmen all feel the flush of cash and readily spend some of the wealth they think they've come upon. After a while, they're all giddy from the sewer gas and have forgotten that they have to pay the money back.

Under these circumstances, inflation is a dead certainty. The only unknown is how and when it appears. Until now, it has happily gone into asset prices. Stocks - then real estate - rode high on the tidal wave of money, while consumer prices, mostly, stayed put. But the dollar is vulnerable, warned the experts. Bill Gross, who manages the largest bond fund in the worlds, claims it is "doomed." When doom will show up and in what guise we do not know. But we bet that when it does show, it will yank up the cost of living for consumers. Prices of imports - at say, Wal-Mart - will shoot up. Anticipating this unwelcome variety of inflation, the central bank may turn the screws longer than expected.

Maestro Bernanke is now, officially, the world's most powerful central banker, but, from Chicago, evidence is emerging that the great economic tide over which he presides may already have begun ebbing. The Midwestern city reports that almost 25,000 people applied for jobs at a new Wal-Mart opening up nearby. We have heard of thousands of people in India applying for jobs at Google, but that is not surprising; there are millions of jobless people in India...and Google pays well.

But Wal-Mart? The merchandiser is Scrooge-like with its employees, and, U.S. employment, supposedly, is at record highs. We are continuously reassured that we have a "full employment" economy. Whence then, cometh these eager jobseekers?

That is the problem with America's prosperity: it has a cheap and gaudy character to it, like too much make-up on an aging tart. The wrinkles show through the cracks in the rouge.

People are lining up to work in Wal-Mart for the obvious reason: they need the money.

Last year, foreclosures rose 25%. Energy and health care costs are soaring. What's a poor boy to do but don a blue jacket and push more consumer junk at "Everyday Low Prices" to people who can't really afford it?

We read in today's press that Britain is ahead of us. Reports vary, but the bubble in real estate prices in the U.K. apparently peaked out a year ago. Since then, bankruptcies have hit new heights. Yesterday, the Financial Times warned that British consumers might be beginning to put their prehensile thumbs to family budget work; they might soon be "pinching pennies," says the FT.

We don't know. But, we wouldn't be at all surprised to see American consumers begin to squeeze their nickels a little tighter, too. True, the present generation has little experience at it, but they might get the hang of it mighty fast, if they had to...especially when they realize how overvalued their ATM - er, house, has become...

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.