Originally Posted by Mountains
Just wait for inflation to kick in here. The Fed has what, more than doubled our monetary base since September 2008? Fun times ahead.
scares me is that the financial world (still comprising mainly the same "experts" who led us into the mess we're in now) seems to have the same blind confidence in the Fed's theoretical abilities to soak up liquidity now that it had in the Fed's ostensibly magical ability to keep interest rates low indefinitely in the '90s.
I'm considerably less bullish than the current financial industry consensus on the matter. Sooner or later, the inflation chicken is coming home to roost. I don't care how good Bernanke is, and generally speaking, I think he's quite good. He has planted seeds that are probably going to bear some ugly fruit. The question is not whether inflation will kick into overdrive, but rather, to what extent and for how long.