Here is another one of Maloney's that is pertinent to this thread. One thing to note. This is a Dec. 2011 presentation. Pay attention to the M3 money supply chart he displays. He is predicting deflation near term with high inflation later. Note a more current M3 money supply chart that I have in the second link. M3 is no longer dropping, but instead is growing at about the 3-4% rate. QE Infinity (QE 3) was put forth to make sure M3 does not contract. Actually I believe it was initiated to prevent another bank collapse do to more debts going bad on their balance sheets, but the effect will be to keep M3 levitated.

Just keep in mind the newly created money never goes exactly where the Fed would prefer it to go. Some inflation offsets some deflation so in theory we should be "just right", but the ones experiencing the deflation in their house prices do not help pay for the increase in the prioce of gasoline, Diesel (transportation), food, health insurance, etc. etc. So while inflation "in aggregate" may be tame, it means that as individuals we could be experiencing the effects of either price inflation, asset deflation, or both depending on where the new money is being spent into the economy. While a lot of QE3 is going into bank reserves so is not being circulated (thereby not causing prices to rise), the majority of the trillion + dollar deficit is being directly monetized by the fed so there is about a 6% increase in base money every year we run that deficit and there are not enough non-Fed bond buyers to provide money that is already previously in the money supply to buy these bonds. Whatever portion of the bonds is bought by the Fed that pays for the government deficit spending, that brand new money gets spent directly into the economy.

Is it too late to buy gold and silver? Mike Maloney

Current M3 money supply chart

John