I have been thinking about the expected inflation that has to hit us from all the money printing. However, thinking about the triggers one has to wonder for example if the capital is allowed to leave the country then from the point of view of the US resident there may be mild deflation and capital contraction, while the rest of the world is awash in dollars. There will be some lag time before these flooded and devalued dollars lead to higher import costs. But locally produced products may not be impacted as much. In the long run in a global economy you will see local producers increase prices as cost of foreign raw materials rises or even as their ability to export these goods to higher demand countries with stronger currencies result in inflation at home. Dollar Carry Trade will lead to mild deflation But for the near term 12-24 months the Dollar Carry Trade is going to lead to further deflation in the U.S. or at a least a slow down in any price increases. Combined factors are 1) As Capital (false capital) is manafactured it will flow right out. 2) Credit Crunch for downstream investors and businesses 3) Translates into Reduced production 4) In the near term the speed of the crisis has resulted in demand collapse much faster than producers anticipated. But this is short term Why is Capital flowing out? As long as rates are maintaned near 0 and the dollar is expected to fall in value. Why keep the dollars in the U.S.? Also add to that the U.S. Fundementals, which support a decline in the dolllar and a bleak financial structure 1) Broke Consumer 2) Outrageous national debt 3) Foreign Financed consumption, so the real driver is not America but our lenders, what are we doing to entice foreign lenders? 4) Eventual Currency Devaluation to reflate economy, and payoff debt 5) highest capital costs in the world and getting higher, 6) Increased regulation coming 7) Zombified banking system The Likelyhood of capital controls once Obama figures out what is going on is also I believe going to lead to a further accelaration of capital flight. Of course once capital controls start it leads to further regulation and nationalization. Capital Controls > Price Controls > Quotas Why would a foreign investor bring capital to the U.S with rates so mispriced versus the risk, and Obama, Frank and gang watching every move you make.