
I can remember sitting in a graduate economics course back in the fall of 2001 that was being taught by a very bright man, who, like our current Fed Chairman, held a degree from MIT. However, unlike Dr. Bernanke, our professor actually understood the effects of monetary inflations.... The topic was growth in the money supply and the lagged effects that it was going to have on the economy. At that time, the various commodity indices were near multi year lows, oil was trading around $20 per barrel, gold was forming a base between 250 - 300, the US Dollar was at multi year highs and forming a top, and the stock market had begun a bear market after hitting all time highs earlier in the year.
The Real estate bubble was about to launch into full blast mode, and of course, commodity prices would then rally. The discussion centered on criticism of then Fed Chairman Greenspan and government(s) in general. We were discussing the money supply, inflation and financial bubbles. He (our professor) was discussing recent increases in the money supply and deficit spending and the effect it would have on inflation and frustratingly compared the then current situation to the early 1970's and said