Why there is less than expected inflation.

The FED has increased the money supply like crazy. Here is a graph showing that:

Inasmuch as the inflation that is reported is the result of the Money Supply M2 and its Velocity multiplied together, the reported Inflation depends both on M2 and its Velocity. Here is the Velocity of M2:

We then have our answer.

As  long as VM2 keeps falling, fast inflation is held off. But, as long as VM2 is falling, the economy will stagnate in spite of the rise in M2.

VM2 has been held down by requiring the banks to keep a very large reserve. And money has gone into the Stock Market.

The FED started talking about unwinding the mess it created. Easier said than done. Inflation is now running at almost 10% year and an increase in VM2 would really kick us into hyperinflation. Trying to restrain VM2 by increasing the interest rate would crash the Stock Market. For the time being, there is no unwinding.

Interesting, is it not, that people readily see that the FED is controlling interest rates, while they believe the propaganda that the precious metal prices are not being held down. Has the FED discovered how to evade the laws of economics? I do not think so. What they had discovered is how to kick the can down the road and hope that when  the deluge hits, they will no longer be in their positions and the blame can be shifted to someone else.