Some people seem to think the following: Yes the money supply has exploded by 50%, but the fed can suck up the excess $$$ by raising interest rates when things improve. My response: There are two highly likely scenarios once the economy starts improving. Say we have a policy of non stratospheric interest rates. We would then have very high inflation (well into the double digits) easily much worse than in early 2008 during the commodity bubble. This will cause commodities to explode higher again along with the euro. High inflation would not be good for the economy. Consumers would be squeezed like lemons. High inflation is highly likely to certainly cause negative real GDP growth, this is very well understood in economics. Or we have a policy of stratospheric interest rates. This could happen since Paul Volker is in the Obama administration. A policy of double digit interest rates could help slow inflation. However nobody knows the situation in the housing market. Things could still be very bad making high interest rates a disaster for the housing market and by extension the economy. High interest rates could certainly cause economic malaise or negative growth. I think the market is beginning to realize that the two likely scenarios aren't pretty. I consider the two above scenarios optimistic really, there are many ways that the train could completely derail. Comments?