Inflation lives! The US Dollar recovers

USD recovery. This is today's chart of the US Dollar index futures. Upon release of yesterday's PPI, showing a strong resurgence of inflation, and today's CPI, also showing significant renewal of inflationary pressures, the US Dollar shot up. Why? Because it ties the Fed's hands at further devaluation of the currency through lower interest rates. This has caused the USD to rise.

Deflation is NOT necessarily a bad thing. Huh? Isn't it blasphemy to suggest such a thing? Deflation increases the net buying power of the currency. It also rewards discipline and savings, because savers' money increases in purchasing power over time. Yet we have been so brainwashed into thinking that a constantly increasing home price (value) is a good thing, that our leaders continue to inflate and inflate without shame.

The only true and lasting economic prosperity is one in which people prosper by discipline, productivity, and saving. The Fed's monetary policy of easy, cheap credit only rewards those who borrow more and more, regardless of risk. It will ultimately harm our prosperity, and the longer we kick the can down the road with cheap, easy credit, the more catastrophic will be that day of reckoning.

The best website for teaching correct economic principles of lasting prosperity is this one, where much of the research and reading material are free:

Ludwig von Mises Institute

Here also is an interesting article by Paul Farrell, who is a lawyer and has a Phd in business. It appeared this week on the Marketwatch.com website.

17 Reasons America Needs a Recession

And here is a link to the wonderful page of the Wall Street Journal's commodities page.

Wall Street Journal Commodities

I understand that with the consummation of the purchase of Dow Jones next week, Rupert Murdoch plans to make the Wall Street Journal's website free, so that he can put advertising on it and derive revenue from it. I can't wait!