Two trillion dollars’ worth is a lot of new money. Isn’t that the definition of inflation?

No. Most deflationary crashes emerge from periods of high indebtedness. They happen when the amount of outstanding credit contracts. New money can be enough to balance the retirement of old debt, and that’s what the Fed has nearly managed to do. But it hasn’t created net inflation, because at the same time more than $2 trillion worth of debt has melted away. If the Fed could create inflation at will, real estate would not be down by half, commodities would not be down 40%, and rates on T-bills would be pushing 20%, not sitting at zero. And think about it: These results have occurred despite unprecedented monetization by the Fed and record federal-government spending. What will happen when those trends slow down or reverse?