Maybe but it's central banks being to timid in printing money, making it too valuable and increasing the demand for it that ends up making them print much more

Maybe but it's central banks being to timid in printing money, making it too valuable and increasing the demand for it that ends up making them print much more just to barely keep the economy going. They are making fiat so valuable that it displaces private investment as a store of value and money accumulates in the economy as idle excess reserves. If central banks had printed sufficiently and promised to push inflation high enough early in the financial crisis, the market would have cleared and much less money would have accumulated idle in the system overall. Here are some of my musings on this: http://bessiambre.tumblr.com/ http://bessiambre.tumblr.com/