(6-15-09) The planet is drowning in money. That's literally what's happening. Governments are printing money as fast as they can. Corporations are issuing new equities and bonds. These events have had the odd effect of simultaneously creating both deflation and inflationary pressures. What does it all mean?

As we have mentioned before, the printing of money per se, no matter how much you print, does not create inflation. That's a concept that Joe SixPack has a hard time getting his mind around because the hoi-polloi have always been taught that when governments crank up the printing presses, inflation is sure to follow.

This ploy has always been used as an excuse for business and industry to raise prices and increase profit margins. They then sell it to the hoi-polloi under the guise of inflation because they have been told that if you print more money you're going to create inflation.

This is a concept that the hoi polloi can get their minds around, i.e. if you print more money you're going to make the value of that money decline.