Here are some interesting charts showing just how much the U.S. monetary base has outright exploded over the past eight weeks.  In two short months, the monetary base has skyrocketed by $300 Billion dollars.  Only a few years ago, it was big news when the government's deficit was that much for an entire year, and now they're blowing that figure out of the water in a couple months.

Add to this the devastating effects of "Fractional Reserve Banking" - where a bank only has to have 10% of the money they lend - and the inflationary effects of this massive monetary increase should be down right frightening.  When a bank lends money, they create the majority of it out of thin air by making a couple entries in a computer.  Of course, this leads to even more money creation and inflationary pressures.

In order to provide some balance in this post, here's another article that discusses whether we're heading towards hyperinflation or deflation.  It also makes an argument for "Stagflation" - High inflation while the economy stagnates - which is certainly a possibility.

Sure, there are many pundits who will say "We can't have inflation because the economy is in a recession".  Funny - a lot of these pundits are the same people who came out last year saying "There's no such thing as a recession and the housing market and U.S. economy will recover in mid-2008".  Revisionist history and a complete lack of memory make things interesting indeed.

I don't know where things are headed any more than the next guy.  And even if the economy is in a recession or depression or tardation or whatever you want to call it, the government is still printing money like it's going out of style.  If inflation is bad because there are more dollars fighting for the same amount of goods, imagine what it will be like if there are way more dollars fighting for even less goods.

Something to think about.