You may not believe it buy I would like to be more optimistic about the future of the USA. But it's hard to stay hopeful when our most esteemed Ivy League institutions have professors like Niall Ferguson at the top of the lecture hall. The Harvard professor appeared on the Kudlow Report last night and actually said the following: "There's no inflation risk, you know they [The Fed] can let the dollar go down another 20% or more with very little inflation risk"
Brian Westbury, to his credit, immediately stomped on the words of the professor by explaining that the falling dollar is the very definition of inflation.
My question is how can it be that an elite member of Harvard academia doesn't know what causes a currency to fall. Please allow me to explain. It's a skyrocketing monetary base, negative real interest rates, interest rate differentials, a chronic trade deficit and a surging budget deficit. But it's the increase in the money supply that is the progenitor of it all. If the dollar falls another 30% inflation will become intractable. It's just a shame there's very few people around that either know or care anything about inflation.
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