> To me the biggest mystery about the 2008 crisis is why so much QE has resulted in so little inflation. Inflation doesn't work as simply as you might expect.

> To me the biggest mystery about the 2008 crisis is why so much QE has resulted in so little inflation. Inflation doesn't work as simply as you might expect. What people believe is actually a big piece of the puzzle. As proof of this look at the Paul Volcker interest rate hikes, that squashed run-away inflation. While his hikes did eventually work, in the short term they did nothing to combat inflation. Why? Because people didn't believe they would help (in fact many thought it would make the problem worse). You had to get the minds of the the investors and spenders on-board before you actually see results (despite what the math might say). I think the reason QE hasn't caused much inflation is because people either don't care or don't understand (most likely the latter). I am sure intentionally obscuring "printing shit tons of money" as "Quantitative Easing" also helps with the psychological factor so as to not panic the masses.