A quick primer on inflation

According to monetary theorists, inflation or deflation is created through the easing or tightening of our money supply, respectively. The Federal Reserve Bank controls our money supply, so its monetary policies ultimately determine the rate of inflation.

Here is the St. Louis Federal Reserve Bank's chart on monetary velocity:

http://research.stlouisfed.org/publications/mt/page12.pdf

The empirical formula is m x v = p x q, where
m = money supply
v = velocity of money
p = price level
q = level of economic activity

Looking at the two charts above, we can see money supply growth has been astronomical since 2008, while monetary velocity has remained moribund. The financial crisis has depressed economic activity due to lack of money velocity, i.e. banks aren't lending as they recapitalize their broken balance sheets. Velocity of money is the only fuse to stoke the fire of inflation. And when it does, look out. The other components are already in place for soaring prices.