“Has America’s Federal Reserve become the single greatest obstacle to global economic recovery? Central bankers around the world increasingly are asking this question as the American greenback continues its Fed-inspired decline and damages the export-driven growth of countries from Latin America and Asia to Europe.”

The preceding quote comes to us courtesy of my friend and colleague, the very bright and fiery Peter Navarro. Navarro, a business professor at the University of California-Irvine, and frequent CNBC contributor, wrote these words in a must-read editorial that appears in today’s Christian Science Monitor.

Navarro’s thesis is that the Fed is fanning the flames of a declining dollar by continuing to throw monetary stimulus at the troubled U.S. economy. “After years of promoting the easy money and loose credit that fueled asset bubbles, it has responded with even easier money and even looser credit. It's like fighting fire with gasoline,” wrote Navarro.

The professor says that, “In a desperate effort to break the back of the credit crisis, the Fed also has engineered the most massive increase in the money supply in U.S. history. Since 2007, the Fed roughly has doubled the monetary base.” But this, he says, is only part of the story.

“The other half of the tale involves the willingness of the Bernanke Fed to help accommodate the rapidly rising, and historically unprecedented, U.S. budget deficits. Such accommodation involves the Fed’s willingness to print new money to purchase many of the government bonds being issued by the Treasury Department to finance the budget deficit.”

This analysis is, in my view, spot on, and it makes President Obama’s sudden concern with the debt quite suspect.

Navarro concludes his piece with a warning on the possible pernicious effects of a “tactical retaliation” from central banks around the globe via large-scale currency interventions aimed at stemming the dollar’s decline relative to their own currencies. 

And what’s Navarro’s solution? “To avoid this destructive cycle, it is critical that the Fed and the Obama administration find the courage to end easy money and the accommodation of ever-larger budget deficits.” 

Let’s hope for all our sakes that the powers that be will heed Professor Navarro’s profound proclamations.