[quote=Rich Toscano]I completely agree that there are factors in place that are holding inflation in check for now (but as you say, how long “now” lasts is a whole different question).[/quote]

That’s my point precisely. And I fear that the Fed won’t be prescient enough to pinpoint the exact time when the monetary brakes need to be applied. In any case, due to political pressures, the tightening will come too late. If inflation was so easy to fine tune using policy tools, why did it get so awfully out of control in the 1970s?

Newsweek has had at least two articles recently where they state that inflation won’t be a problem. The fact that the biggest liquidity injection in US history could fan inflation is ignored, even laughed at. Newsweek’s argument? That inflation is low and getting lower today, so it won’t be a problem in the future.

Newsweek’s position is just like that of the drunk guy who jumped from a 50th floor window. Half way down he’d probably be thinking “geez, all those people who said I’d die if I jump were a bunch of idiots! I jumped, and so far I’m fine!”