Professor Elam

Steve Forbes is right on in this column.  HE correctly identifies the culprit not as interest rates but the declining dollar as the source of inflation in oil and metals prices.  But the problem is not at the FED. This will not be solved by raising or lowering interest rates, though I suspect eventually higher interest rates will result.  The FEd is helpless in the face of drunken sailor spending by Congress, flooding the world with dollars.  A recent Business Week article noted that inflows of dollars to the US are slowing.  If OPEC ever ditches the dollar, we are in serious trouble.  In the 1930s the US was still a creditor nation, the world owed us. Now the US is a debtor nation, we owe the world. If the official US policy is to continue to diminish the dollar, it is only  a matter of time before the world realizes we are repaying in a type of banana republic currency. At that point they will say no thanks.  Sorry Steve, but just selling bonds at the FED will not solve this problem.