Ah, I see, the surge in 2008 is why we are having such a problem with inflation today!He's talking about the surge in currency in circulation in 2008. Yes, exactly. This is why I'm not an old-fashioned quantity theorist. What has to be going on here is a large increase in the world demand for US currency during the financial crisis. All the more reason to be worried about inflation, as the crisis-driven demand goes away.
o what has been happening to (the log of) M2 (the monetarists' favorite measure of money -- he does call himself a New Monetarist after all)?No, New Monetarists don't care about broader monetary aggregates. Neil Wallace taught us that.
I also like the contention that calling Bernanke a "wuss" is not "disparaging Bernanke's character."This seems a bit strange. I'm not sure how Mark comes by all this respect for authority. In this context, I think it's healthy to be skeptical about what these central bankers are telling us. They have a penchant for secrecy, and I don't think we should take everything they say at face value, or necessarily trust them. We've given them an important job, and I think they are taking some big risks. If they screw up, we'll all suffer for it.
Despite Williamson's wishes to the contrary, there's no evidence here that inflation is just around the corner, or even down the street.Now the guy has me wishing for inflation. In a sense this is actually true. Early last year I bought a load of TIPS, and I continue to put my money where my mouth is. My TIPS have been doing quite well (not quite as well as the stock market, but a pretty good annual return, and particularly nice over the last few weeks). The current TIPS break-even inflation rate has gone up to 2.11% on 10-year bonds, and 2.62% on 30-year bonds. I'm expecting better things in the future. If I were really nefarious, I would be behaving like Mark, and complaining about how tiny the QE2 program is.