In Silicon Valley, we like to think in terms of problem solving and also in terms of basic user-language programs.
We have learned from 2011, and now understand the 2012 strategy as follows.
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Step 1: Define the problem, i.e. the US economy is not robust.
Step 2: Assume you must deflate (lower the value of) the US dollar (= price inflation) to have a robust economy, jobs, houses, etc.
(This has been a FED assumption for many years learned from a 1930 lesson that is now obsolete. Kind of like traveling by covered wagon over Donner Summit and exactly like trying to pull yourself up by your own boot straps.)
Step 3: From Step 2, Decrease the value of the US $. (Effectively print more USD as in “quantitative easing” or anything else you want to call it.)
Step 4: By definition, Step 3 increases the value of oil (and all prices) in USD.
Step 5: Measure the continued worsened economic decline due to the increased day-to-day price of oil, gasoline, transportation, fast food, rent, etc. from Step 4.
Step 6: Report that economic performance continues to be poor. No jobs, no loans, nothing except price inflation from Step 5.
Step 7: In that case Go To Step 1.
Brilliant!
