Concerning the Fed's possible exit strategy, in particular, paying interest on excess reserves, I'm inclined to believe that is a tool that *could* work. I guess, for most people, the fear of price inflation is a few years away. We are still fighting deflation, and the Fed's balance sheet has grown exponentially. After the recession, and deflation has passed, and the private sector comes back to the marked for lendable funds, that is when an "exit strategy" has to be ready, and able to save us from inflation. Since the Fed (unlike a business) can simply print money out of thin air, it can always, and easily out bid private enterprise in the auction for available funds. Since the cost of thin air is just about $zero, the Fed can continue this activity for as far as the eye can see, ad infinitum (errr sumpin). Sure, excess reserves will continue to balloon, like the bottom line on your X-wife's credit card account(s), but no matter how large they swell, (excess reserves, not X-wife) they will remain in containment, holding price inflation in check. We're seeing this right now. Over the next several decades, or how ever long it takes, the Fed could enact a policy of gradually letting the private sector out bid them at whatever rate will allow growth, while keeping inflation in check, until the economy finally *grows into* the size of the excess reserves of today. It would be like a long,.... long,.... long term soft landing plan, involving different administrations, and different Fed chairmen, and it would require that all these people, in turn, resist political pressures. There will probably be a train wreck along the way, but I'm just saying I think it could work; I don't think, at this point, we are absolutely doomed to hyperinflation. Where am I wrong?