Inflation only occurs when the sum of money and credit increases. So far lenders have been reducing credit faster than the Fed has been increasing the money supply. Perhaps that will turn around some day, but there is reason to think that we have already passed "peak credit" and such levels will not be seen again in our lifetimes.
http://globaleconomicanalysis.blogspot.com/2008/06/peak-cred...
That is a misleading analysis. The credit you are referring to as part of the money supply is bank credit, which is created by the central bank when they introduce currency units. Credit has been moving from the private sector to the public sector. The US govt has already run 1T debt in Q1. What they couldn't borrow from abroad with treasuries, they had the fed print money to buy the excess treasuries. Now we're hearing noises about how the fed wants to issue bonds. Inflation is coming, just have to figure out what to hoard.
