hi doma,
that wasn't the agreement. we agreed to give you an extra year for inflation to appear after which you said if there was no inflation, i was right and you were wrong. you can't extend your theory forever. i sense a serious case of reneging on an intellectual deal!!
your claim was that hyper-inflation would flow right out of QE now turns out to require an explanation for why it didn't. it requires a retrospective explanation for the latency of inflation regardless of QE for many years.
ah. that is why my explanation was correct. it was predictive. it said there would be no immediate inflationary effect. that QE would not generate the inflationary response you anticipated because the economic environment into which money was being introduced in large amounts wouldn't support it.
inflation won't occur in an environment in which property values are dropping off a cliff, consumption collapses and jobs are being lost. why? inflation reflects demand (the prices of goods) and labour. money becomes relatively valuable. interest rates drop.
if inflation reappears, it will be because the economy is recovering. i'm afraid that the reappearance of inflation cannot make your monetary theory recover. it died years ago.
rather than keep moving the goalposts, i suggest you accept that you were wrong and find a better theory!!
but of course, no one ever changes their mind. evidence won't do it. theories are more powerful than experience.
i will forgive you, my old friend, but you must get out your rosary and say 30 Hail Bernankes.
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