FT’s Alphaville headline: “The Fed’s Run Out of Money”. Relevant quote from the Treasury press release:

The Treasury Department announced today the initiation of a temporary Supplementary Financing Program at the request of the Federal Reserve. The program will consist of a series of Treasury bills, apart from Treasury’s current borrowing program, which will provide cash for use in the Federal Reserve initiatives.

If I’m not mistaken, the Fed’s printing dollars now. Hello inflation?

My generation—those born in the late-70’s and later—haven’t had to deal with inflation as adults. May you live in interesting times, as the proverbial Chinese proverb says.

UPDATE: My monetary theory fails me — it’s not money-printing: it’s the treasury recapitalizing the Fed by putting the U.S. further into debt.

Is it inflationary? Potentially, depending on how the Fed acts from here on out. And depending on whether this reeks of desperation, I suppose.

The inimitable Brad DeLong makes me think I won’t be buying speakers even after I get Bush’s package in my hand:

We’ve seen some quite remarkable movements in commodity markets the last two months…. Topping the group is wheat, up 46% over two months; I won’t try to translate that one into an annual inflation rate because I don’t want to scare you…

Luckily I’m eating less these days anyway.