On this point of whether Quantitative Easing could lead to hyperinflation, it’s worth clearing up what’s perhaps one of the biggest sources of confusion there is on this subject, which is the connection between inflation and hyperinflation.
In short there is no connection between the two.
Inflation basically happens when there’s a lack of slack in the system, and the existence of too many dollars causes prices to shoot up. So, for example, if labour is tight, and you pump more dollars into the system (prompting more businesses to try expanding and hiring) you’d expect the cost of labour to shoot up, mitigating the value of those extra dollars. If the energy supply is tight, and you pump more money in, energy prices will just shoot up.
Even if that happens rapidly (such as the energy inflation of the late 70s) that’s not hyperinflation.
Hyperinflation is basically what happens when your economic system collapses, and you end up running the presses like crazy in, creating a vicious cycle where the world rapidly loses faith in the currency and so on.
Wikipedia has a good list of historical examples of hyperinflation and what you see are a number of countries characterised by wars, political ruin, and other forms of structural collapse. Attempting to stimulate the economy by expanding the money supply is not found on the list.
Folks like Peter Schiff see a hyperinflationary collapse right around the corner in the US (and for similar reasons, folks like Kyle Bass) see one happening in Japan.
If that happens, it will be because we experienced a total collapse of the US economic system, not because Bernanke is (however futilely) trying to jumpstart the economy, or because our debt is sky high.
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