You cannot fix systemically broken credit markets, you need to replace that component of the money supply with real cash in a situation like this. The result will be hyperinflationary.
Assuming your scenario is correct, and I'm not disputing that it is, just how is "replacing that component of the money supply" even inflationary, let alone hyperinflationary? By your own terms, it's replacing "money" removed from circulation, not in addition to current "money" in circulation.
For example, subprime mortgages have evaporated. None of these people will be buying homes or cars on credit now. But we release a tidal wave of fresh new greenbacks into the market, and the segment of the economy which has been traditionally cash is hit with this flood of greenbacks.
When the credit markets evaporated, so did the housing market and many of the things that go with it. Those markets are not coming back soon.
Besides that, Obama has made known his penchant for printing money. Print he will. Hopefully not on the scale of Weimar Germany or modern day Zimbabwe, but he will print those greenbacks.