Stockpiling metals and falling $US not sure thing for global inflation

Comments on Robert Gottliebsen’ “A two-pronged recovery”, on http://www.businessspectator.com.au/bs.nsf/Article/A-two-pronged-recovery-pd20090505-RQSU5?OpenDocument&src=sph, 5/05/2009

There are so many economists and business commentators in the world, so are there so many views. We have seen so many reports saying that it is major exporting countries with surplus funds that caused global imbalance and resulted in Americans’ excess consumptions and assets bubbles. Having just read this article, I got a feeling that we will need to worry about rising future American interest rates and global inflation. I got a bit lost here.

Firstly I am not sure the logic will follow that falling US dollar and rising American interest rates will be accompanied by higher global inflation. Yes it is likely and understandable that American inflation may become higher as a result of falling US dollar. It may also to be true that the prices of metals denominated in the US dollar would be higher with falling US dollar.

Secondly, a fall in US dollar, on the other hand, would mean the rise of other currencies relative to the former. This would mean a downward pressure on inflation in those other countries.

Thirdly if the global financial market is not perfectly mobile, then the reduction in funds to the US would suggest an increase in funds available elsewhere and their interest rates are likely to fall.

It is likely that the impacts will be quite different for the so called former excessively consuming countries and the former excessively saving countries, with perhaps a mixed implications for others in between. So how can we draw the conclusion of likely global inflation? Could you please explain!