By mid-2011, the Fed will have monetized just over $2 trillion worth of debt since 2008 to bring the value of its total assets to about $3t. This does represent a huge amount of fiat money. But the overall debt load is $65 trillion. Thus, the Fed will have monetized only 5% of the total, meaning that 95% of the outstanding debt is still suffocating the economy like a giant pool of sludge.
This debt figure, moreover, is way conservative. It does not count derivatives, which are IOU-ifs representing an estimate risk of indebtedness of $600t, or the unfunded liabilities of the federal government, which by some estimates amount to $300t. - Robert Prechter
I haven't found a lot of things to comment on lately, but this one takes the cake. Perhaps this is why the TIPS auction was so weak today. It's hard to see how you get prolonged inflation from these figures.
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