This is an interesting kind of inflation. Fiat money driven. Every new dollar a creation of what in wednesday night poker is called "shorting the kitty". Some commodities will deflate! The metals. Excepting the precious metals.
Excepting oil and alternative fuels. Necessaries. Those will inflate. Have inflated.
There are a couple of Freepers who are astute on this inflataion with some deflations dynamic. For some reason I am not. Maybe imawit knows.
In the early 1800s, ALL BANKS had a minimum gold reserve from which they issued notes. The stronger your bank, the less gold you held---sort of the exact opposite of the goldbug theory. NO BANK held more than about 10% reserves, except on rare occasions. ALL BANKS that were chartered printed their own money. The result? Overall, a very strong system. There were two national panics in 75 years, 1819 and 1837. The latter, scholars know, is overwhelmingly blamed not on Andrew Jackson's "war" on the BUS, but on the decline of Mexican silver shipments (and I despise Jackson).
The Panic of 1819 is the only one even remotely attibutable to "inflation" deriving from banks, but, most scholars agree, more likely tied to the residue of the War of 1812.
The Panic of 1857, as I have argued in a (apparently well-accepted) article in the Journal of Economic History, was entirely due to POLITICAL changes brought about by the Dred Scott decision. Even then, fewer than half the country was affected. Again, though, there was nowhere near enough gold to "regulate" the system---it was almost entirely regulated by the market, which valued notes as to the reliability of the banks issuing them, based on those banks' physical assets (loans, land, etc.) NOT their gold.
Beginning in about 1900, the amount of gold in the country "backing" National Bank Notes was miniscule. The reason there was an issue in 1893 was that the Sherman Silver Purchase bill opened a window for the gold to flow out of the country in an arbitrage arrangement. J. P. Morgan stepped in, as he again did in 1907 (a fairly minor panic). But even he admitted that he no longer could move enough gold to affect the markets.
Today, there is only 7% (!!!!) of all "money" in PHYSICAL form (i.e., paper or coin), and of all that "money," less than 5% of that could be "backed" at any time by gold and silver. In short, the nation has virtually ALWAYS been on a "fiat" money standard, and attempts to impose a "true" gold standard (by the Jacksonians) met with disaster, as there simply wasn't enough to circulate even in small forms.
There is absolutely nothing wrong with "fiat" money if the information flow is unimpeded. People can, and do, know which money is good and which is bad, as they do today with international currencies.