despite all the jabber about unconventional measures, as far as we know the Fed hasn't actually implemented *any* of them
Haven't watched the government so closely, but I recall people being surprised at the unexpectedly generous funding for - I believe - the Endowment for the Arts... or, for that matter, the new super costly Medicare initiative... or, the military expenditures. Needed or not is a different discussion, but those are all examples of growing expenditures paid out of deficit spending. Expect more generous unemployment benefits, welfare, maybe things like mortgage relief, various public projects, etc. etc. Inflationary policies can be sold to the voters by populist demagogues of either party. After all, "people are more important than banks and paper balances and economic theories..."
PS - edit - You asked me to remind you this once in a while... -g:
*If they do resort to unconventional measures* then we can discuss the type of inflation that will result. It will be skewed heavily toward commodities, gold, and other low capital intensity items (things where there isn't excess capacity, or where excess capacity has little impact on pricing), as well as things with very inelastic supply/demand characteristics. Also, pricing power will go to items that are not typically financed, as things purchased with credit run smack into the debt-deflation headwind. |
