According to the Wall Street Journal, “Federal Reserve Chairman Ben Bernanke on Tuesday put the U.S. dollar squarely on the Fed’s radar screen, saying its slide against

other currencies has led to an “unwelcome” rise in U.S. inflation and may be a factor in inflation expectations. Bernanke also suggested that the Fed is unlikely to lower official interest rates further, though his remarks suggested that – barring a further rise in inflation expectations – the Fed probably won’t contemplate higher rates until there is more stabilization in home prices.”

            Well, thank God somebody has started to talk about fixing the precipitous decline in the dollar.

            I did a post on this a couple of months ago.

            According to the experts, core inflation hasn’t gone up.  But guess what?  Housing costs play a huge role in determining “core inflation.”  Since house prices are falling faster than the Titanic’s anchor, this is a unrealistic view of inflation.  Prices are falling on houses because there was a bubble, not because of larger economic reasons.  Falling prices is not good news for all those people who have all their money tied up in their homes, especially those Americans who are inside out on their mortgages.  Read more...