

WSJ: Get Ready for Inflation and Higher Interest Rates - agrinshtein
http://online.wsj.com/article/SB124458888993599879.html

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gasull
Deflation seems more likely:

Fiat World Mathematical Model

[http://globaleconomicanalysis.blogspot.com/2009/02/fiat-
worl...](http://globaleconomicanalysis.blogspot.com/2009/02/fiat-world-
mathematical-model.html)

 _Will this printing create [price] inflation? This is dependent very much on
what money will do next. If banks will not lend and banks sit on that cash
forever and ever like the great depression because the risk is too high and
the banks do not know if the lending will end up in good assets or bad assets,
and because banks are in so many bad assets now they probably will not lend at
all._

 _That is the observation that Murray Rothbard made, that during the Great
Depression that banks have chosen not to lend because the risk of accumulating
bad assets was far to high. So they were sitting on massive reserves. That is
what is developing right now._

 _A good example is what happened in Japan in 2001-2002 where the Bank of
Japan pumped 300% at one stage and lending continued to collapse. I expect
similar things to happen here. If lending will not increase we can conclude
this will not be inflationary._

