Wednesday, April 15, 2009

The Great Inflation Debate


Here is a good offering in defense of the "nasty inflation will come" position. The big counter argument presented by the "deflationists" hasn't changed. They argue that inflation fears are unfounded because we've already had our inflation. We created nasty asset bubbles and now the air is rushing out in all directions. So no matter how much money the Fed creates, it simply can't create nearly enough to fill the monetary black hole that's opening up as the entire economy delevers from absurd heights. And so the debate rages on.

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