re: #468 Iron Fist

So it’s pretty obvious that whatever hocus pocus they try to use to hide it, they’re going to effectively be printing money to cover the bailouts. How high do you think inflation is likely to go? I don’t know enough to even make a guess at it, but it sounds like when all is said and done the bailouts will be about equivilent to a year’s GDP.

Unreal amounts of money.

15% to 20%.

Take the amount of money pumped into the system and multiply it by about a factor of 10 and that will be the impact. Plus the velocity of money (how fast a dollar changes hands in a year) will likely speed up as the economy turns around and that will make the inflation even worse.

Part of the problem is that the Keynesians have taken back over. Bernanke is swinging the Fed back to being run under a Keynesian view.

FWIW, Keynesians don’t see interest rates as being particularly important.