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This comment was added on October 5, 2010

I have observed that people are still talking about expecting massive inflation shortly.  Given how long the massive "quantitative easing" has been going on in the meantime - years (about 2), not just months - wouldn't one think that one should be seeing it already in the meantime?  But one is not.  Sure, prices of commodities are going up, but that is not a "massive" inflation, and we are certainly not seeing it in the "retail" economy as a whole.  In fact, what we are seeing is deflation, especially in housing, during the last couple of years.  Anything that requires credit (housing most of all) took a hit - and that is exactly what I am talking about; we have a credit crunch that is causing the (additional) money not to make it into the real economy. 

Where has the money been going over the years?  Just look at what is going up a lot at the time - in other words, what is experiencing "massive" inflation.  During the 1990's (especially the late 1990's), it was the stock market (the Kondratieff wave in combination with the law against recessions explains why - see this website).  In the earlier 2000's it was the real estate market - but that ended when the real estate market hit a brick wall due to running out of buyers at the margin.  And in the meantime, it is Obama's deficits, which are much, much bigger than even George W. Bush's deficits (but Bush's deficits, not Obama's, were responsible for putting us past the knee of the exponential in the national debt, that happened before Obama even took office as president).  In other words, the money is now going into the banks and then they are investing it in Treasury debt, thus financing Obama's huge deficits - but note that the money is not actually getting into the real economy (in any major way), so it is, in fact, not generating inflation in the consumer economy.  Quite the opposite is happening. in fact, because the consumer economy is still being starved of cash due to the credit crunch.  And I predict that that will continue (despite the Fed's best efforts - the Fed is powerless to stop it) and will, in fact, lead to the downfall of the economy because there is no way to eliminate the credit crunch once it has started (Austrian economics explains why, the Keynesians are clueless) and in an economy that is as dependent on credit as the modern American one is, that is deadly, it is toxic.