The level of our nation's money supply is fine - its just not moving (sort of like it ate a whole loaf of white bread and got constipated).
This thing is going to go in one of two directions.
If everything turns out rosy then that means the economy got extremely constipated, yet enormous pressure was building up in the bowels behind the blockage. If, and when, that pressure is relieved then too low of a discount rate would have added to the inflationary pressure upwards - thereby creating more inflation than was good for our economy.
If everything is headed south then the government is going to do everything it can to stop deflation and Great Depression II. They're going to force liquidity into the marketplace at all costs and keep lowering interest rates to do it. They will also keep churning out bad loans just so somebody will buy something, enticing them with the really low rates. This will continue to perpetuate the credit derivatives problem, because of defaults, and we will be stuck in the same vicious cycle.
If it's not moving, where is the inflationary pressure? You ever hear of the velocity of money?
If, and when, that pressure is relieved then too low of a discount rate would have added to the inflationary pressure upwards
What pressure? Oil is down over one third from the peak.
They're going to force liquidity into the marketplace at all costs
Like they are now?
They will also keep churning out bad loans just so somebody will buy something
Or they could buy debt already outstanding.