Great article, Bob. It nicely explains that Bernanke has setup an inflationary mess, if he allows the money supply to remain at its current levels. The article also discusses the upward pressure placed on interest rates from an attempt to decrease the money supply, if he tries to fight off the inflation. Would the upward pressure cause interest rates to rise so high that current US gov interest debt payments would be unmanageable?

If that is the case, how could the US gov possibly resolve the situation? It seems to me that the only possible way would be to dramatically increase government revenue and cut government spending. As far as revenue, though, a tax rate increase wouldn't really have the effect of increasing revenue. It would only harm productivity (during an already recessionary period) and have a negative effect on future government revenue. So the government spending cut would have to be drastic. However, cutting government spending is nearly an impossible feet as it is and Obama's administration seems perfectly content to run deficits.

It seems to me that the only resolution would be either gov default or inflation. Both of which would obviously greatly reduce the value of the dollar.

Is the above anaylsis correct? Is there any way that the dollar does not fall dramatically? If the dollar fall is inevitable, is there any way for us to gauge the likely drop in value (i.e. is there a way to measure the inflationary and loss ot investor confidence effects of monetizing the US national debt? What historic data do we have for currency value after government default? Would default be the kiss of death for the dollar?)

Thanks again for the article.