Since printing $2 trillion did not spur credit expansion, pray tell why would $50 trillion? [...]
Indeed, if $50 trillion printed tomorrow sat as excess reserves (the most likely event), it would have the same effect as if it was buried in the ground, or not printed at all. Such is the nature of a credit-based economy, and a point that has caused hugely inaccurate inflation forecasts from many Austrian economists. [...]
I do not think the Fed itself can cause hyperinflation and more importantly I am sure they would not if they could. The reason is "Hyperinflation Would End The Game"
- Hyperinflation by definition would destroy the currency and thus the banks
- Hyperinflation would destroy the wealthy and all their corporate bond holding
- Hyperinflation would destroy the Fed
- Hyperinflation would destroy the wealthy political class
To understand how powerless the Fed is, one needs to understand the difference between credit and money, how much the former dwarfs the latter, and what the Fed's role is in getting banks to lend.
These hyperinflations all had one common denominator: during a period of instability, spending was used as a political tool and it got out of hand. I understand that the circumstances of each country were different and that it is perhaps unfair to say, lump Israel in with Argentina. But each country faced political factors that created instability or a national crisis; the government spent heavily to gain popular support, and resorted to the printing presses to pay for their spending.Therefore, Mish concludes
Those calling for hyperinflation are extremely misguided. It is not going to happen in any timeframe worth discussing.
Make sure to read the entire argument at the source.