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<p>[QUOTE=&quot;SilverSurfer, post: 969829, member: 21603&quot;]&quot;Core US inflation is the lowest since the mid-1960s. US business&nbsp; &nbsp; inflation (pricing power) is at zero. Bank lending is flat and securitised&nbsp; &nbsp; consumer credit has collapsed from $900bn to $240bn in the last year.&quot;</p><p><br /></p><p><a href="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7933235/Commodity-spike-queers-the-pitch-for-Bernankes-QE2.html" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7933235/Commodity-spike-queers-the-pitch-for-Bernankes-QE2.html" rel="nofollow">http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7933235/Commodity-spike-queers-the-pitch-for-Bernankes-QE2.html</a></p><p><br /></p><p>Well, $660 billion in credit gone in one year.&nbsp; Yeah, I can see how that&#039;d be deflationary.&nbsp; But, this is consumer credit.&nbsp; Bank money on hand after the bailouts and record profits along with all the QE&#039;ing that&#039;s been going on is inflationary.&nbsp; Just wait till the banks start lending again, and all that QEing starts to move to the velocity side of the Quantitative Theory of Money equation, and see what happens.</p><p><br /></p><p>I&#039;ve said this before, I&#039;ll say it again.&nbsp; Price volatility due to monetary policy seems to lag 4 to 6 years.&nbsp; So, all the bailouts and QEing will be felt in 2012-2014.&nbsp; Do recall that in July and August of 2008, the Fed was worried about Inflation.....not a housing bubble burst.[/QUOTE]</p><p><br /></p>

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