Behind World's inflation

U.S. consumption increased by 3.2 % over the fourth quater of 2010. Although Somebody has hailed it as a sign of economic growth, this is nothing more than pure inflation determenated by deficit and monetary stimulus of the Federal Reserve.

Monetary expansion created by the FED has again shown its destructive effects: inflation has begun to be exported overseas. U.S. dollar is enjoying an enviable position of reserve currency that doesn't follow the rules of other currencies and allows the U.S. to borrow, spend and consume with money that the FED simply creates "out of thin air". In this way the U.S. can expropriate resources from the world by buying other's goods and services abroad like a counterfeiter who spends his fake money at a shop. Unfortunately, the excess of dollars return back home to be converted into Treasury bonds whereas U.S.  partners with this same amount of dollars finance their deficits and encourage an irresponsible consumption of resources. In fact they haven't any incentive to use their dollar surplus to buy goods and services as in recent decades American industry completely lost its competitiveness. 

So, What does it happen to U.S. partners currencies? 

The dollars obtained by exchanging for exported goods must be converted to be spent in these countries. 

If markets did freely, the excess of dollars would raise the price of currencies with which U.S. dollar was exchanged. But, actually it doesn't work like that and to prevent worsening of their exporting, U.S. partners have no other choice but to keep their currencies competitive with a new monetary expansion. 

In fact, to maintain a stable exchange rate, they must buy the dollar surplus by resorting to a quantitative easing. Therefore, when the Federal Reserve prints fresh money "out of thin air", other central banks make the same thing. In this way, the amount of dollars sold is parked as Treasury bonds, allowing the U.S. to keep their interest rates low and to continue selling its debt. This whole process is an untold damage to economies in terms of inflation. 

In summary, the  G-20 central banks have flooded the economy with liquidity without any relation to the real global production. All this is the cause of rising food price, speculative investment and ephemeral illusion of prosperity. 

In North Africa, this economic system based on fraud now starts to kill people too.