He has also worked successfully to contain inflationary pressures.

It will be difficult to ease these inflationary pressures this year.

As European growth slows, so will inflationary pressures.

As European growth slows, so will inflationary pressures. So Trichet should relax, stop threatening others, and let the economic slowdown do the work for him.

Currently, Russia s greatest economic concern is growing inflationary pressure, driven especially by food prices.

All this is happening at a time when inflationary pressures hamper the usual monetary and fiscal remedies.

To dampen the additional inflationary pressures implied by a weaker rupee, more aggressive fiscal retrenchment is needed.

More generally, the rapid expansion of credit risks increasing inflationary pressure and fueling the formation of asset bubbles.

China s economy is prone to rapid growth, with buoyant investment demand sustaining powerful short term inflationary pressures.

Again and again, he has repeated that, so long as inflationary pressure remains contained, his main concern is the high level of US unemployment.

But Chinese officials know that renminbi appreciation is also in China s interest, as they seek to dampen inflationary pressures.

If Brazil s government does not tighten fiscal policy, the exchange rate will generate more inflationary pressure from the rise in prices of imported goods.

Given modest inflationary pressures, long term real interest rates rose but nevertheless remained close to historical lows.

But inflation pressures will be even worse if the US recession remains mild and global growth remains solid.

So he recently toned down his rhetoric by warning that euro zone inflationary pressures should not be over dramatized.

Asian governments will probably gradually lose their battle in this war in 2011, allowing their currencies to appreciate in the face of inflationary pressures and threats of trade retaliation.

Today s inflationary pressures are partly the result of the lagged impact of the stimulus package that China adopted in 2009 to fight off the effects of the global financial crisis.

And the fact that higher wages in Germany will be matched by lower wages across southern Europe suggests that continent wide inflationary pressures will remain subdued.

But Spanish exports recovered more quickly than British exports, and inflationary pressure via the exchange rate is now a major constraint on future British monetary policy.

It gives comfort to ECB critics like Sarkozy, and otherwise puts pressure on them to drop the central bank s inflationary bias because of its effect on the euro.

First, inflationary pressure will grow in already overheating emerging market economies, where oil and food prices represent up to two thirds of the consumption basket.

A Euro now costs around 1.60, up from 0.90 in January 2002. Yet the Fed, in its desperation to avoid a US recession, keeps pouring more money into the system, intensifying the inflationary pressures.

On the contrary, the Bank s current policy of fighting inflationary pressures by slower growth, a stronger euro, and the credit crunch seems just about right for the time being.

The US, in turn, cannot understand why China should be so reluctant to allow the renminbi to appreciate, as doing so would help to dampen inflationary pressures.

But this will create its own challenges, including recurrent inflationary pressures and surges in capital inflows, leading to greater policy experimentation.

Monetary growth may increase inflationary pressures and the risk of an asset bubble down the road, but it helped ensure that China s economy did not fall into a vicious downturn when the financial crisis hit.

The lessons of earlier battles against inflation are clear on one fundamental point inflationary pressures cannot be contained by negative, or slightly positive, real short term interest rates.

How can China ensure stable and sustainable growth in the face of significant internal and external challenges, including slowing medium and long term growth, rising labor costs, and growing inflationary pressure?

True, low interest rates, together with a second round of quantitative easing, are causing considerable global distortions, as funds flow into fast growing emerging markets, fueling inflationary pressure and asset bubbles.

Yet the pattern of exchange rate movements in the rest of the world has been largely unrelated to existing current account positions. In fact, currencies of surplus countries with heavily managed exchange rates have actually depreciated in real effective terms since the summer, creating inflationary pressure and frustrating global adjustment.

As a result, the Chinese will be able to allow the renminbi to rise substantially against the dollar if they want to raise its overall global value in order to decrease China s portfolio risk and rein in inflationary pressure.

There is also a risk that capital inflows to emerging markets will be mismanaged, thus fueling credit and asset bubbles. Moreover, further increases in oil, energy, and commodity prices could lead to negative terms of trade and a reduction in real disposable income in net commodity importing countries, while adding to inflationary pressures in emerging markets.

If monetary authorities respond appropriately to growing inflationary pressure recognizing that much of it is imported, and not a result of excess domestic demand we may be able to manage our way through it.

To dampen the additional inflationary pressures implied by a weaker rupee, more aggressive fiscal retrenchment is needed. Even so, a depreciated rupee will increase the burden of repaying foreign debt, and deepen the woes of domestic companies and banks.

A stronger renminbi would help to reduce rising inflationary pressure in China by reducing the cost of imports, which would also increase Chinese households real incomes a key goal of China s new five year plan.

The Fed s independence is a key component of its anti inflation credibility, and a key test for Obama will be to support the Fed s efforts to withdraw the liquidity before substantial inflation pressures assert themselves several years from now.

With export performance also set to slow, owing to the economic downturn in the United States, employment and growth could be weakened further, which implies mounting pressure on China s government and thus on the fiscal deficit, creating another source of inflationary pressure.

This is not to argue, of course, that the ECB should cut interest rates now. On the contrary, the Bank s current policy of fighting inflationary pressures by slower growth, a stronger euro, and the credit crunch seems just about right for the time being.

But former US Federal Reserv e Chairman Alan Greenspan warns of inflationary dangers.

The dreaded inflationary endgame suddenly looms as a very real possibility.

Popular pressure is growing

That has been sufficient to convince markets that any stimulus will be withdrawn before significant inflationary forces gather.

The secretariat makes every effort to reduce such pressures, but notes that they are not entirely within its control.

And, as trading accelerates, the pressures increase.

Domestic pressure could very well bring down the regime, but international pressure will not.