This would mean a depression not just for the US, but for Asia and probably Europe as well, for the US can remain the world’s importer of last resort and guarantor of effective demand only as long as its domestic consumption is strong. But if interest rates don’t rise far enough, the value of the dollar will spiral downward and US inflation will spiral upward like in the 1970’s, setting the stage for the type of extremely painful measures imposed by then Federal Reserve Chairman Paul Volcker.