According to Bloomberg Bernakes $600 billion strike against Deflation is paying off. They claim that because of the stock and debt markets rise it has improved bank lending and as a result economist are forecasting faster Growth. The question is, has this created another problem? Inflation! In order to prevent deflation you must inflate the dollar. The FED said that it will not need to extend the buy program beyond the end of next month; we will see.
The following is a chart of currency that is actually in circulation:
Currency in circulation is the amount of money thats is flowing through the public sector.
Lets take a look at the Monetary Base:
Monetary base is the currency in circulation plus money that is held in the central bank reserve. Ouch!
The more that you have of something the less valuable it becomes. This is similar to what happened to Germany after World War I. Papiermarks became utterly worthless do to an excessive amount of the currency in circulation. The concern here is HYPERINFLATION! Never in American history have we done anything similar to this.
You be the judge!