Ok, I'm going to be a chicken little again...

[MercutioATC]

(Seems I was called a chicken little when I started posting in January of 2007 about really ugly economic times coming ...)

The biggest thing holding inflation in check right now is tight credit. Expect further low inflation...and possibly some deflation...in the short term (6-9 months). Within 18 months, all of this spending will trigger double-digit inflation...and the traditional "raise the Fed rate" silver bullet won't be available.

...or maybe I'm wrong this time.

[Taverner]

1. Will this be the Terminal Hyperinflation that finally kills our economy?

[MercutioATC]

2. I don't think it'll be an end of the world thing, but it'll be ugly and protracted.

Depending on how it's dealt with, it could have effects like significant civil unrest.

[Taverner]

3. We're already seeing civil unrest in most of the world

Who knows if it will happen here

[MercutioATC]

6. Things aren't bad here yet.

Kill a few million more jobs and add significant inflation and I believe we'll see unrest the likes of which we haven't seen before.

[notesdev]

4. The Fed 'cure' for inflation is higher rates

Lowering the rates loosens the money supply and causes inflation to rise... when it does, raising the rates is the tool to try and lower inflation. In other words, inflation is proportional to growth in the money supply, and the Fed Funds Rate should move inversely with the inflation rate.

[MercutioATC]

5. Typo...corrected in the OP. Thanks.

The "RAISE the Fed rate" won't be available because the inflation won't be caused by rampant economic growth...the economy will still be in the tank, though probably slightly better than it is now.

[JohnWxy]

7. The REpublican Deregulation Dystopia is killing inflation by inflating the unemployment rate.

When the unemployment rate is three times the inflation rate, inflation is the last of our worries.

The Republican Dystopia