Good point. The money printed has yet to reach retail markets. No inflation? Look at health care, education, energy and stocks. Politicians are constantly duping citizens with the "core inflation" term.
same here, people weren't bragging about the rate, they were bragging about how short the maturity was on their cd
With respect to Vicirek who makes great posts. Money printing as inflation is a myth in my opinion due to a confusion. The analogy I like to use is that printing money and stockpiling in rooms will obviously not cause inflation or any effect at all. The key is that the money has to circulate to have an effect. Then inflation is a possible outcome. So the drop in the velocity of money is holding things in check currently. I think it recently hit a new all time low. Velocity of money measures the effect of the money circulating and the faith of people in the economic system indirectly. The FED and government spending have put the economic airplane into a stall. Will we pull out? Time will tell. You can't get something for nothing! There is a total supply of physical money and an amount of money in economic use. So stagflation can't exist. That is deflation by a politically correct term. It the economy is not able to take up the new money, then we are in deflation by lowering interest rates to Zero as some entities struggle and die reducing the money supply and sticking the banks yet again with uncollectable and particularly with unserviced "assets". I think that the FED is actually creating the problem they see by stalling out GDP and trust in the system. Should (through some miracle) the economy suddenly pickup massively, then inflation will come quickly seemingly out of nowhere. Just my two cents.
Maybe it has something to do with exporting inflation to China through their pegged and artificial low currency which makes them more competitive The right response is just print dollars and buy stuff from them for paper In response to keep the peg they have to print too which results in inflation over there, not in US. Also as others mentioned its currently quite deflationary environment with lots of bad debt which keeps things in check. Besides they are not exactly printing money, in my understanding fed is more changing one type of money (bonds) into other type of money (cash).
My comment before was first thought about almost a decade ago now. Today one question I would like answered (and I haven't yet settled for myself) is this: Is the world currency inflation-deflation game (ignoring multiple moving parts - labor, interest rates, trade imbalances, GDP growth rates, government size increases and spending increases, entitlements) in essence a zero sum game ( like I believe international trade is)? The implications of this would be incredible. Of course the question may just be nonsensical (that has happened before) LOL. If the answer is yes, then your comment restated says that part of the inflation is shown in other countries and that was likely the true intent of FED QE - forced currency devaluation in China. China is able to adapt and counter this action rendering it less effective over time.
I don't know if world currency inflation-deflation game is zero sum - its too complicated for me I guess in normal environment it shouldn't be as every country would inflate just a bit. But pegged currency situation is a bit different as one country needs to maintain peg. So as Chinese has trade surplus, they get a lot of dollars and to exchange dollars to yuan they need to print to maintain a peg (otherwise currency just appreciate) which results in more money in China which results in inflation and real estate bubbles... So that kind of situation could be viewed more like a "game". And I don't see any other answer from US just to print. China is very big and with very cheap pegged currency they can absorb investments (with technologies and know how) for a long time until it sucks other economies dry US business already manufacture lots of stuff in China as its much cheaper.
Too complicated for me too. That is why I use models of how the world works. Sometimes those models are wrong. ... and the base currency in a world fiat system is also a pegged currency, isn't it? That is one of the roots of the US currency and GDP problems - search out the Triffin dilemma. Along with a base currency comes responsibility or the whole world monetary system is in trouble. One can't get something for nothing. Truth will right its head sooner or later. The odd thing is that base currency cheating is not called manipulation. How does that make any sense at all?
Has anyone mentioned this yet?: I think the OP was referring to significant inflation, like he expected with $85B being printed a month. The answer to this OP is, the fed is creating m1 money supply, but it is not being transferred to m2 money supply at the same rate. If it were, we would see significantly more inflation than we see today. As far as the effects of the Fed buying the $40B of the MBS every month($40b of the $85b), you can see the effects clearly- they started this on Jan 1, 2013, and look at housing prices since then-- I for one have a property in Phoenix that has increased significantly in price since the start of year, and I've also heard California home prices are up as much as 50% since the start of the year (this is a good thing, it will help clear the shadow housing market of 6 million homes).