Still Worried About All Those Reserves?

Many commentators still seem to be screaming that hyper-inflation is around the corner. The crux of their argument is that the Fed has pumped hundreds of billions into bank reserves. There is a chart circulating, which you may have seen, illustrating this explosion of credit. After all, reserves normally translate directly into fresh lending. I have reproduced the chart for you here:

Deflation, Not Inflation, Is Your Worst Enemy

Some of the most common questions and comments we get concern inflation and the money supply. Many feel that a fixed or tightly controlled supply of money would prevent inflation. One email predicted chaos due to rampant "double digit" inflation "sure" to come next year because of the Fed and Treasury's recent actions. There is a hidden danger to a lack of inflation that is not readily apparent.