Continuing with this thread: Here is the answer as to why he thinks the FED is not printing money. It is because people confuse credit creation with money creation. Money, (as in currency) is dwarfed by outstanding credit something like 65billion in cash vs 38+ trillion in USD credit outstanding. About a 600:1 Ratio.

When one receives credit it seems like money because it becomes deposited "as if " it were cash. But the account is only credited with that amount of money: the actual money upon that which the credit is based is not in the account. So it is an IOU for cash NOT cash itself. Paraphrased from Prechter Conquer the Crash p. 392.

As far as the claim that Bernanke can drop money from Helecopters and inflate the system at will is also bogus under our current money creation system. " If investors were to become informed that the FED would follow the copter course it would divest itself of dollar debt assets, causing a collapse of bonds notes and bills. This collapse would be deflation" ...The govt nor the FED would wish such a thing to happen...because its borrowing power is one of the only 2 powers over money that it has, the first being taxation. Conquer the crash p.393

These points highlight the FEDs practice of piling more leverage on top of the existing mountain of credit. At some point it can't be serviced and begins to contract. Then we have deflation. I do agree that eventually we will get hyperinflation, but I think that comes after the central bank and govt gets around to printing money rather than just offering credit.

Just a wild guess, but I suspect that comes in about 5 years.

Plunger