A severe bout of inflation in the next decade?
As I set transfixed watching the market freefall yesterday in North Dakota before a speech, I began to notice what the talking heads were not saying. Over three hours I did not hear the word "inflation" once.The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.
The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.
The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone. [More]
It is the lesser of several evils now, and I believe virtually assured to devalue the gigantic debt we are creating right now.