[gipper81]

Federal Reserve Chairman Ben Bernanke is a big part of the problem, says Rogers, chairman of Rogers Holdings. “Mr. Bernanke can’t print much more money again. The world is going to run out of trees.”

Yes, we had a huge explosion in the money supply in 2009. But, right now, M1 and M2 are barely growing and the banks are certainly not lending.

[schu]

From my study it appears that private/consumer credit is declining, but this is offset by a growth in government debt. Also, much of what we “lent” to the large financial institutions is on the sidelines in the form of reserves.

Many believe that we are facing deflation “short term” and then hyper inflation when all those reserves are lent out/money created when things bottom out. This seems the most plausible to me.

Also, those sectors of the economy most affected by the credit crisis (housing) are facing price deflation, while those that did not (food, energy) will be facing inflation. Hence you get squeezed, wages decline and your primary asset (house) declines in value yet staples prices (oil, food) increase. Toss in large increase in taxes and it will be a long time before we see any real recovery IMHO.

schu