Alan's Inflation.

This article presents the thoughts and observations of the author regarding inflation and the efforts of the Federal Reserve to control it. Inflation is beginning to rear its ugly head, thanks to the Federal Reserve's printing of too many dollars. Commodity prices--especially gold--have been signaling this resurgence for several months. If the Fed does nothing until late summer or fall, long-term interest rates will shoot up sharply. Should Greenspan & Co. act now, the hit for longer-term debt--especially housing mortgages--will be relatively small. Businesses have kept inventories on a tight leash, both to control expenses and to take advantage of lower and lower prices. Now the opposite will begin to happen: Corporate purchasers will start to buy more stuff, lest they pay more later. China, the oil companies, steel companies and others are not the villains causing steeper prices. The Chinese yuan is tied directly to the greenback. China has been growing rapidly for years. Why, all of a sudden, is that growth inflationary? Growth is not the cause; excess dollar creation is. Thanks to the Fed, China has a serious economic crisis brewing. The longer the Fed waits, the more distortions we're going to get and the worse the global repercussions.