Supply-siders have been warning of cheap-dollar inflation for quite some time. Think David Malpass, John Ryding, Brian Wesbury, Mike Darda, Don Luskin, John Tamny, Wayne Angell, Jerry Bowyer, and myself. I’ve even taken to calling the weak dollar the U.S. peso. There’s also Paul Gigot and Steve Moore over at the Wall Street Journal editorial page, both prominent leaders in the movement to resurrect King Dollar.
And today we received some great news on this front.
Fed head Ben Bernanke, finally figuring out that the weak dollar is driving up inflation, has signaled a major policy shift toward a strong dollar. In fact, Bernanke has not only acknowledged that the cheap dollar has caused “the unwelcome rise in import prices and consumer price inflation” -- as booming oil and commodity prices have leaked into U.S. inflation through the cheap dollar -- he may well have set a floor underneath the greenback. This is big news.
Now, isn’t it about time Sen. McCain made a beeline for a strong dollar? That’s my take. You can read about it here in my column for National Review Online.