Fed Chair Speaks Out Against Smiley Inflation

WASHINGTON, November 27 — Ben S. Bernanke, chairman of the Federal Reserve, warned Monday that recent inflation trends were "unwelcome developments," indicating that he was particularly worried about a relatively recent phenomenon known as "smiley inflation."

In his toughest comments yet about the risks of smiley inflation, Mr. Bernanke said Internet users were utilizing smileys and chat abbreviations such as "LOL" and "ROTFL" at unprecedented rates. He indicated that while rising consumer prices were of moderate concern, what really worried him was the "irrational exuberance" regarding smileys characterizing the current market landscape.

"Five years ago, the basic unit of currency exchanged for a moderately amusing remark was a regular smiley ( :) ), grin smiley ( :D ) or a simple 'heh.' These units were rapidly devalued and were soon replaced by the laughing smiley ( :)) ) or LOL. Now there is an increasing prospect of serious LOL devaluation, which has a lot of people concerned."

Bernanke stopped short of saying the Fed would take decisive action to combat smiley inflation. As of Monday, the Federal Smiley Use rate remained unchanged at 36.3%, meaning that roughly a third of absurd announcements by government officials would continue to be followed by a single smiley, wink smiley ( ;) ) or eye-rolling smiley ( 8-| ). Use of devil smileys ( >:) ) and tongue-sticking-out smileys ( :p ) also remained unchanged at 12.5%, despite pressure from the Bush administration to raise this rate.

Bernanke would not comment on reports that the Treasury is considering the release of several additional high-end smileys. "For now," Bernanke said, "We believe that ROTFL and LMAO remain sufficient for most humorous transactions." He added that while the regular smiley has been devalued almost to the level of the dot ( . ), there remain some smileys, such as the clown ( :o) ) and crazy smiley ( 8-} ), that are inexplicably underused. "We think it's sort of a Sacagawea dollar situation," Bernanke said. "Is it a dollar? Is it a quarter? Nobody really knows what to make of some of these smileys, and that lack of certainty pushes up the use of LOL and ROTFL." The real worry, however, is that overuse of these abbreviations will cause users to resort to increased use of ROTFLOL and ROTFLMAO. If ROTFLMAO becomes devalued, many analysts believe the Treasury will be forced to release new smileys or abbreviations.

A recent Congressional Smiley Committee report had suggested the gradual introduction of several new smileys, including:

:(~) Laughing so hard you can see that thingy hanging down in the back of my throat.

:^&)) Laughing so hard that milk is shooting out of my nose.

:-[X=| Laughing so hard that I wet myself.

:)) [+] Laughing so hard that paramedics had to be called.

:)) $$$ Laughing so hard that I expect to be paid for it.

The committee declined to endorse the so-called "nuclear option," the release of FTIEH (Funniest Thing I Ever Heard). Committee members cited concerns that it left no room for future abbreviations of even greater value.

"The work of the Smiley Committee is appreciated, but I believe it is premature to be talking about the need for more high-value smileys," Bernanke said. He is known for holding the controversial opinion that the level of humor on the Internet has actually been decreasing over recent years, despite the proliferation of smileys. His remarks on this subject have fueled concerns regarding the possibility of a "humor bubble." Smiley inflation occurs when there are "too many smileys chasing too few really funny jokes," Bernanke stated. "There are a lot of markets where users are throwing out LOLs in response to Garfield-level humor. I don't believe that's sustainable over the long term."

Bernanke was asked to comment on an IM conversation between two office workers that made news over the weekend. The chat log, which was leaked to the press by an anonymous employee of AOL Time Warner, has created a firestorm of controversy regarding the company's alleged encouragement of the blatant overuse of smileys. The chat log reads, in part:

SidneyJennings2003: what r u doing this wkend?

KarenN1970: wacthing gilmor grlz. U?

SidneyJennings2003: LOL! me 2

KarenN1970: LOL ur 2 funny. is austin coming over???

SidneyJennings2003: we broke up

KarenN1970: OMG no way!!! :( :( :(

SidneyJennings2003: hes a big jerk i borke up with him!!!

KarenN1970: ROTFLMAO!!! ur 2 funny!! :D

"I don't see how anyone can look at an exchange like that and conclude that it represents a reasonable usage of smileys or abbreviations," Bernanke said.

Tim Kellerman, Vice President of AOL Time Warner for :D, dismissed the controversy. "Everyone knows that young female office workers use a ridiculous number of smileys," Kellerman said. "The market discounts it." He argued the use of smileys among users of all demographics remains well within historical norms. He added, "We're feeling very good about the level of use of smileys overall :) ."

The market's reaction to Bernanke's statement was mixed, with most Fed watchers expressing " :| "or " (:| ".