Posted 11/11/2012 13:23 (#2690851) Subject: What happens if inflation takes off?
While there are non-believers in the deflationary crowd, those of us who believe Bernanke when he says a country with a printing press can always create positive inflation, the question arises "what happens if inflation gets out of hand and takes off?". The standard academic response is that the Fed will reverse course and undue what it has done. After all, it has used that method in the past (Volker), the theory goes they can do it again. But can they?
Here Jim Grant gives a very good explanation of what the consequences might be if they should try. The part of the discussion concerning this is about mid way in the video, but I urge you to start at the first and listen all the way through because the whole interview is worthwhile. It has some monetary history and a number of interesting topics relating to what we call money.