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Earlier this morning, CNBC personality and noted monetary hawk Rick Santelli told Wall Street Journal reporter Jon Hilsenrath he never predicated his arguments against Fed easing on inflation fears.
Of course, the lack of accelerating inflation over the past few years is in part what's allowed the Fed to continue its bond buying program and keep interest rates low.
Here's the exchange:
HILSENRATH: People have been saying for 3 or 4 years, 'Inflation inflation inflation!' Show me! Show me...
SANTELLI: NO no no no no, that's not the issue. THE issue is, you're not going to have a lot of inflation showing up when you have no velocity. I've talked about commodity price volatility in the past, go back to the tape…I never said it was about inflation. But this "Santelli Exchange" segment from Oct. 2012 (via Zerohedge) certainly seems to suggest otherwise. In it he warns about how the seeds of Weimar were being sown by the Fed: "To be nor not to be — of course I'm talking about inflation. But what's very interesting is, as I look up at gold — of course it's reversed off its highs — but today it hit a high of $1794.40. That's the highest intraday level for 2012, indeed it goes back to November last year when we traded over $1,800. But the issue is ,'To be nor not to be?' Is it inflation vacation or inflation gestation?…Let's consider a couple of things. Printing money — is it really the answer? ... If we just print a million dollars for every man woman and child in the country, and handed it to them, won't that fix everything? Because in order to really look at printing — I like to take everything to the extreme...Look at the Weimar Republic and their hyperinflation in the early '20s. It didn't happen overnight, I've ued the analogy, it's a lot like soybeans you plant em, you wait, conditions take some time, you need some sun you need some water, but ultimately things start to grow, and are we in that phase or not?"
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