At its latest committee meeting, the Federal Reserve
stressed the perils of deflation. Fed chairman Alan Greenspan
made it clear that if there's a whiff of it the Fed will act.
In sharp contrast, European Central Bank president Wim
Duisenberg slumbers on, occasionally mumbling about the
dangers of inflation.
The Fed and everybody else is printing money. The state, too, is
spending cash as if it grew on trees, with eurozone governments
slipping into massive annual budget deficits and the Bush
administration launching huge defence spending programmes and tax
cuts.
The Fed has made 11 interest rate cuts since the beginning of
2001. The US federal budget has already swung from a surplus of 2%
of GDP to a deficit of 3% and is heading towards 4% to 5%. The
dollar has fallen nearly 10% against all other currencies and over
25% against the euro in the past 15 months. And to add a...
