I concede the point that the Taylor rule is a better measure of controlling inflation with marginal interest rate adjustments then the Phillips Curve. But the Phillips Curve still has some bite left in it particularly in relation to unemployment figures and a booming economy catalyzed initially by Obama's TARP, QE 1,2,3, and the governments purchase of the most toxic debt assets from private companies including those it absorbed such as GM. Unemployment continues to go down, inflation is rising, and in Europe the ESFS and ECB are asking those parties that hold 81 Billion EUROS in greek bonds to take a 53.5 percent hair cut to supplement the asset relief efforts visa vie Angela Merkel and other European leaders. It appears to me that if the United States were to aid Syria, Israel were to bomb Iran, and the European Oil Embargo were to occur within months of each other the results could incite catastrophic hyper inflation causing atavistic post world war one Keynesian reconstruction of the global economy.
To offset this crisis, given that the production costs of North American National Gas, and oil extraction through hydraulic fracturing and other measures is the lowest in the world. The Fed is easily capable using price controls to manipulate our currency, in this case devaluing it. If this were to happen the United States could once again become a major competitive export center of the world not seen since the Cold War era of the 1950s. In 2011 the U.S. exported more oil-based fuels than it imported making the U.S. a net exporter of such goods, primarily disiel, for the first time since 1949. ...........
