Rich Karlgaard: Watson had Holmes. Luke had Yoda. I’m lucky to know a few people like them, high-beam thinkers who cut through the fog. Brian Wesbury is one.

When Wesbury says the economic weather looks good, clamp on your crampons and head for the summit. You won’t die in a blizzard. His words on inflation, the dollar and interest rates are bankable. Bonus points: You can trust Wesbury because he was raised in Missouri, schooled in Montana–good old red-state common sense here–and now works as the chief economist for Griffin, Kubik, Stephens & Thompson in Chicago. He does not suffer from the effects of drinking New York or Beltway Kool-Aid.

So, Brian, what about the weak dollar?

“You mean, am I worried?” he asks. “Yes–I’m at 6 or 7 on a scale of 1 to 10. Inflation signs are proliferating. Gold prices have continued their three-year climb and are now trading solidly above $450 an ounce. The CRB commodity futures price index is trading at a 23-year high. Oil is still near $50 a barrel. The dollar is very weak. Every commodity–and every market–has its own supply and demand pressures. But excuses about why one commodity price or another is elevated no longer hold much water. The only explanation for such a widespread jump is an excessively accommodative monetary policy.

“This is a sad turn of events. The Fed had the inflation battle won, but now we’re losing.”

For 2005 Wesbury forecasts general inflation of 3.5% to 4%. “That doesn’t sound like much,” he says, “but that’s exactly where it was during the early 1970s, when Richard Nixon put in wage and price controls.” Wesbury says when inflation tops 4%, a nasty dynamic can take root. “The Fed tightens, and the economy tanks. So the Fed backs off, and inflation gets baked in. Suddenly it’s at 6%.”

More here.