First congratulations on becoming a "president."
I have felt and Sinclair recently alluded to the same if I read him right, that Armstrong and the government cut a deal. 'Nuff said and it is opinion only.
Re inflation/deflation: The original and Austrian definitions of inflation and deflation have never changed. Inflation is an increase in the money supply and deflation is a decrease in the money supply. Everything else that happens (prices) are effects of the increase or decrease. When there is "loose money" all kinds of absurd investments and positions arise. Tulips worth more than the price of a house, companies with nothing more than an idea with P/E's over 100, etc. At the other extreme really valuable stuff such as gold, silver, and their miners become undervalued while people (dumb money) chase crazy dreams. Reality eventually asserts itself. The timing boggles the mind; but the uninformed masses truly have no clue what is happening.
At the end of an inflationary increase in the money supply there is a deflationary collapse comensurate with the degree of inflation which preceeded it; which in this case is already large and will continue to grow larger because no politician is going to stop this on his watch. QE to infinty is a perfect description coined years ago by Mr. Sinclair. The politicians hope they can outlast the eventuality. There is no personal incentive on their part to do what is right; the politician is entirely SELF motivated.
The other factor (which you pointed out) and very few consider is monetary velocity. Price is a combination the amount of money chasing goods and services and the monetary velocity. While the amount of money has increased dramatically it has not been available to the consumer or small businessman; therefore velocity has fallen almost to the same degree the money supply has risen. The result is very mild inflation SO FAR.
You are absolutely correct. Since the people in charge will not change course and accept a gigantic depression, the continued increase in the money supply simply will not cease.
Once people start recognizing the inflation that must occur (unless a depression of unimaginable magnitude is accepted) and begin understanding it the velocity of money will increase. No one; whether we consider the public, the financial institutions, or the banks themselves will continue to hold dollars (or any other paper currency for that matter unless said currency has real backing which none now do) for any length of time. To do so would be insanity.
The scramble for the only true safe haven will the begin and begin in earnest.
The problem, unfortunately, cannot be solved. We will experience all the horrors of human governmental failure.
P.
