Gingham's advice to Ben is: On a practical level holdings rates where they are while sounding the inflation horn is probably the soundest thing to do? Give the markets the expectation that rates will rise without dampening current stimulus or making the cost of oil worse.

LeRoy: It seems to me that giving people 'the expectation that rates will rise' without actually doing so would be running a severe risk of destroying whatever credibility the Fed has left when it comes to fighting inflation. The old Aesop's fable of the boy who cried wolf comes to mind. This is what the Bush administration has been doing for some time: talking tough about the importance of a strong dollar while doing nothing about it in the real world. The end result has been a more-or-less continuous fall in the value of the dollar. I suspect that most currency market participants are coming to regard Henry Paulson's talk about the desirability of a strong dollar as being kind of a humorless joke, one that provokes mirthless snickers. When Jean-Claude Trichet and the European Central Bank talk tough about inflation, people sense that they mean it, and so the Euro rises versus the dollar. What will cause the price of oil to worsen is if the Fed continues its tough-guy talk about inflation but then does nothing about it. 'Speak softly and carry a big stick' is probably good advice when it comes to monetary policy.

Lately, Ben Bernanke has been adding his voice to Henry Paulson's about the need for a stronger dollar. If Big Ben does not back up his macho talk with some interest rate hikes before the end of summer, I am anticipating a rather serious further fall in the dollar, with unpleasant implications for oil and other commodity prices.

Talking tough and then revealing yourself to be a wimp is no way to win admirers, whether you're doing it on the beach or in the halls of some central bank.