Asia Times Online: Weak dollar induces a dream world - dollar's value has little impact on consumer prices in the United States."Hahaha! What idiocy"

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Weak dollar induces a dream world - dollar's value has little impact on consumer prices in the United States."Hahaha! What idiocy" - by Richard Daughty

From Reuters we learn that Lewis Alexander, Citigroup's chief economist, predicted that "The Federal Reserve will cut interest rates by 100 basis points before June to help the housing market." Well, that's interesting and all, but then one has to wonder about whether Mr Alexander has any idea what in the hell he is talking about when he went on to say that "the Fed would not be too concerned that the drop in the dollar would be inflationary. Studies carried out over the years had shown that the dollar's value had little impact on consumer prices in the United States." Hahaha! What idiocy!

The clear conclusion is that the dollar is headed the same way as the former Reichsmark. Falling demand is eroding the purchasing power of the currency, and the central bank responds to it by creating more currency units - 'printing paper' in the case of Reichsbank and 'adding liquidity' in the case of the Fed.