Naked Capitalism Link of the Day

Today's link: The Myth of the Exploding US Money Supply, at Business Insider.  This was a little too technical for me, but this summary I can understand:

So yes, the US government is running a massive $1.5T deficit, however, by any metric of money supply we can see that this is barely offsetting the continued de-leveraging that is occurring across the US economy.  We are certain to see higher rates of inflation in 2011 (especially if oil prices surge higher), however, it is not an accurate portrayal of reality to conclude that the USA is “printing money” uncontrollably and flooding the world with dollars that will lead to hyperinflation. That is simply not the case and the data speaks for itself.  At best, we are barely printing enough to offset the destruction of de-leveraging….

I think the key to people's concerns about the government quantitative-easing goes back to the attacks on government in general by conservatives.  These people weren't getting concerned when banks were creating money out of thin air during the housing bubble, because that is what happens in the fractional reserve banking system.  But after these awful loans collapse, and mortgage bonds are wiped out, the government steps in to replace that money, and people are aghast.  I hate to tell you folks, but your home was increasing in value because banks were creating money to give to people to bid up houses.  That is inflation, and when houses were increasing in value by more than 10% a year, that is nearly hyperinflation.  Private banks "printing" money is good, while government replacing the money destroyed when housing prices collapse is bad?  Maybe it's just your hatred of government that makes you think that way.