It’s the collapse in velocity that is “keeping the presses running”. Knowing Bernanke’s background tells you he will do whatever is necessary to avoid the monetary mistake of the Great Depression when tightening occurred triggering a double dip sever recession. The author indicates the key issue: when velocity improves, how quickly can the Fed drain the liquidity out of the market to avoid runaway inflation. Timing will be everything.
“when tightening occurred triggering a double dip sever recession.”
That didn’t happen. But ideas have consequences and since everyone in power think depressions are caused by deflation we will get endless helicopter dumplings. Or maybe ideas don’t matter and government control of monetary systems will only ever produce one answer, Keynes and Friedman or no.
It is true that people are sitting on money, and that it is not changing hands at rates satisfactory to our overlords. But once in a blue moon businessmen forecast correctly, and maybe skittishness is justified. For one thing, why expand if you don’t Knowles whether the federal government will up and confiscate your profit tomorrow?