What is the current level of inflation in the UK?

Will debt level cause Fed to print dollars thus cause CDs to lose money and cause inflation and ruin dollar?

• Is the dollar is going down in value due to deficits and the increase in money suppy (currently increasing 13%) along with other countries not wanting to hold dollars as a reserve because dollar is indeed losing value? Also noteworthy is that countries want oil priced in euros or a basket. Will this leave the U.S. unable to pay back what it owes, so it will inflate the currency to pay back less? Which then will cause inflation and then will leave CDs and Treasuries in dollars at a guaranteed loss? For example will a 10,000 deposit will be worth 9500 in one year in purchasing power after taxes and 10% inflation? Will CD rates rise to offset inflation impact like in 1980s? What should someone do right now with a large portion of assets in CDs and Treasuries? Thanks All (YIKES) ...was this rate cut the wrong move and is it a desperate attempt to bring back faith in the dollar?

• Answer:

  The Fed doesn't print dollars.....the Treasury Department does; but that's just a nitpick, because The Fed does control the money supply. Since the collapse of Bretton-Woods, we've essentially been using inflation continuously to finance deficit spending (if inflation is relatively heavy, the real value of your debt decreases). When you look back to the 1980s, you aren't looking back far enough. In the early 1980s, the Fed took a hard line against inflation, and jacked rates up high enough to cause a recession and break the inflationary pressures. The current situation is more similar to 1974....we've had a long unpopular war, long period of deficit spending, and now the Fed is being called upon to bail out an overvalued stock market......in the 1970s, this eventually caused runaway inflation. To your last comment, rate cuts will decrease the value of the dollar, not increase it.