Paul Kasriel of Northern Trust argues that Greenspan has the second best record on inflation of any postwar Fed governor, not because he intended it but because he benefited from a number of outside trends that have kept price inflation low. Kasriel predicts, however, that: “Greenspan is more likely to leave his successor a hand similar to that which Miller inherited from Burns. Government spending is on the rise for as far as the eye can see. The U.S. indebtedness to the rest of the world is high and will be rising as far as the eye can see. U.S. policymakers will attempt to lessen the impact of this indebtedness on the standard of living of Americans by running Fed Governor Bernanke’s greenback printing press overtime. At first, this will induce foreign central banks to speed up their printing presses as no country right now wants a strong currency. This will lead to global reflation. Later, however, foreign central banks will get that anti-inflation religion again. This will lead to a run on the dollar and a sharp acceleration in U.S. inflation.
