Why is it so was explained by M. King Hubbert when he addressed the US Congress in 1974: currency supply grows exponentially in tandem with industrial output (made possibly by resource consumption growth).

Once oil production stalled in 2004 it all happened again, resources drawn to the economy eased while paper currency kept flowing. The Fed then engaged on a program of central rates hiking - trying to mimic Paul Vockler's actions in the 1980s. But this time the American folk was so indebted that it only took 5% to burst the housing market and create a credit crisis.

In order to avoid further financial/credit pain the Fed has to keep the money flowing - weakening the currency and inflating commodities.

I wrote about this here.

Vencit omnia veritas.