Why Bernanke Is Inflating So Much
In it, we see the explanation for Bernanke's behavior. This man is obsessed with the thought of stopping deflation which he views as an imminent threat, despite all the signals of soaring inflation. Indeed, his obsession with this is likely what causes him to ignore the increase in inflation. In it he notes that there are quite a lot of unorthodox policy instruments which would allow the Fed to stop deflation and notes how the 1933 devaluation of the dollar ended deflation in America.
"Deflationists" like Mike Shedlock overlook not only the current inflationary monetary- and price trends because of their incorrect money supply definition, but also overlook the obsession that Bernanke have with literally doing whatever it takes, including monetizing the national debt , to stop deflation if deflationary monetary trends were to appear. The deflation of the great depression and in Japan had its origin in an inability (due to the current gold standard, which although watered down compared to the real thing was still a real policy restraint) and unwillingness to use unorthodox policy measures. Once such was used, as in America 1933 when the gold standard was ended, deflation ended too.