I always get a real kick out of hearing that “the consumer is 70 percent of the economy,” mostly because it gives me a chance to heap ridicule and scorn on whoever said it, and I say that the consumer is 100 percent of the economy!

“Synchronized boom, synchronized bust,” explains our old friend Marc Faber in the Wall Street Journal. Where have you gone Alan Greenspan? Your nation turns its lonely eyes to you. Ou… ou… ou…

And this, together with the economic disaster that is already out there, only proves the utter, utter failure of the Federal Reserve to ‘preserve the value of the dollar’, which is their freaking mission in life. Morons!

All around the world this Friday, investors are wringing their hands. The papers are full of the cause. More job losses. Slower growth. Bankruptcies. Debt.  There. Don’t you feel better now?

Despite the chaos on Wall Street, the Fed yesterday left its benchmark interest rate on hold at 2%.

Martin Hutchinson says the Fed has finally starting doing its job: putting price stability over Wall Street’s demands. Real interest rates are negative. This is feeding inflation. It also means Treasury bond yields – also currently below the rate of inflation – are too low and should begin to rise again.

Martin says investors can profit from this situation with the Rydex Juno Inverse Government Long Bond Strategy (MUTF:RYJUX).

What has really changed?…importing inflation…hoping to prove Friedman wrong…Can the U.S. central bank really begin fighting inflation in a serious way? Ah, dear reader – there’s a cruel twist to this story…The cure for high prices is high prices…and so the global economy lurches forward…and more!

In the currency market, the dollar was sharply higher against the euro. Late Tuesday, the euro was trading at $1.5434 vs. $1.5536 on Monday.

U.S. Federal Reserve Chairman Ben S. Bernanke came out in support of a stronger U.S. dollar today (Tuesday), indicating the Fed would remain on pause at its next meeting.

Inflation is global and it has prompted French president Nicolas Sarkozy to seek a cap on sales taxes on fuel products if oil prices continue to rise. This from Thomson Reuters:

French President Nicolas Sarkozy said on Tuesday the European Union should consider capping sales taxes on fuel products if oil prices rose further but his proposal got short shrift from Brussels.

Prices should remain more or less stable when the supply of money increases at the same rate as the supply of goods and services.