Bubbles, and yes, that includes credit bubbles, have their own internal dynamics: they MUST pop when they reach critical mass.
Trying to prevent the pop, or even increase that mass, is futile. And even though that may be more about physics than about finance, why it is so hard to understand is beyond me. The deleveraging, a.k.a. debt deflation, has hardly begun, and it for now remains largely hidden behind a veil of QEs. That doesn't negate the fact that ultimately QE is powerless to stop it, even as it sure manages to fool a lot of people into thinking it can.
'couldn't agree more with the above, and i agree that hyperinflation is not likely in the short-term.
but it all begs the question - why are central banks trying to prevent the inevitable (and causing mass market distortion and malinvestment with QE)?
the reason, imho, is that they only care about the short-term (although their job is supposed to be the opposite). they figure that if they can just keep the bubbles inflated then things will be ok for their masters (private banks + rich). i don't think they have a clue about how to create a stable long-term financial environment, and i don't think they care - that will be someone else's problem.
*waits for hell to freeze over*
