I may not be an eminent commenter, but I can be an imminent one: ten minutes after I hit the submit button.

I think a lot of folks making business decisions came of age during the Carter years and remember inflation from that time. Inflation sends out false signals. It mimics an increase in demand for your product when actually it is an increase in demand for all products.

Now, if it is only your product where demand has increased, your cost will stay steady and you can raise prices to help you reinvest and raise production and increase profits. Your resources will come at the expense of some other producer who finds demand for his product dropping. But when demand for everything increases, then cost will increase, too. Then your new investments won’t pay off.

So expanding the money supply is one of many government actions recently that has raised uncertainty for business. So the velocity of money stays low, and the price effects of currency inflation are masked. As velocity picks up, they will have to “deflate” the money supply which will be tricky.

Personally, I would have focused more on business, consumer, and investor confidence — improving it, I mean.

There’s a movie from the 1930′s about Poncho Villa where Poncho has his face put on the currency. The printer shows up with the notes, but then refuses payment in the new notes. Talk about “the low velocity of money,” that stuff didn’t make it out of the box.