Where's the Inflation?
There’s a good argument about the financial meltdown that needs to be addressed. On the one hand, there are pundits like Glenn Beck who are warning about massive inflation just around the corner. On the other hand, there are pundits who say that we are in a deflationary period and we need to worry about that instead.
One question arises that most who believe the inflation argument can’t seem to answer: if the Fed is pumping all this money into the system, why isn’t it showing up in prices? Well, the short answer is that the banks are hoarding it to keep their balance sheets from impersonating the Titanic. The longer answer, backed up by an economist with an actual Ph.D. can be found here. Gary North does a fine job of explaining the deeper reasons why the banks aren’t lending the money, and why they will in the future, leading to serious (>10%) inflation.
Where do I stand on the issue? I ask the question in a different light: when has printing money not backed by gold and/or silver led to lower prices? Look for serious inflation in the future.