Here we go again...The Great Inflation vs Deflation debate

Once again, we have the inflation vs deflation debate popping up. For the record, I'm firmly in the inflation camp. Like I said in a previous post, inflation is a monetary phenomenon caused by excessive printing of money to pay government debt. If the printing of money exceeds the annual inflation rate, it will lead to unexpected consumer price inflation down the road (about 24 months). The current official CPI number is negative 1.2%. Now let's take a look at the M1 money supply. From June 2006 to June 2008, the M1 bounced between 0% and negative 1.5% Hmmm -24 months. Now you're probably wondering what the current M1 number is. Well, from June 08 to present, it went from zero to 16.3% and is currently bouncing between 14% and 16%. You will see this monetary inflation show up in consumer price inflation by June 2010. This freshly printed money is currently being held up by the Fed and the big banks. It's currently being used to buy Treasuries and to mop up toxic garbage bets. A little monetizing of debt never hurt anyone? Google this: What caused hyper-inflation in Zimbabwe or Weimar Republic.