In his first 100 days, President Obama has presided over, and encouraged, the greatest printing of money in our nation's history. Never before has the federal money supply been increased so much so fast. On its own, the Federal Reserve announced in March that it would help prop up financial institutions by printing $1 trillion. The Obama administration agreed with that step and, for its part, had already authorized the U.S. Treasury to borrow money printed by the Federal Reserve for:

— $789 billion in economic stimulus;

— $280 billion for Freddie Mac and Fannie Mae;

— $200 billion in the carry-over budget from 2008 (the one with all the earmarks but considered as "last year's business" by the administration);

— $350 billion (the second half of the Troubled Assets Relief Program, or TARP).

Together with President George W. Bush's "stimulus" tax rebates of last summer, $160 billion, and the first half of the TARP money under him, $350 billion, the total increase in the nation's money supply, printed in less than nine months, is a staggering $3.129 trillion.

The entire supply of money in the U.S. economy is $8.3 trillion.

Thus, we have printed more than 37 percent in additional money in our economy since last summer.

When money is printed, it shows up in one of two ways. Either it stimulates real growth, or it stimulates inflation.

Which would be really scary except that the last sentence is just wrong. Tom should say "when money is spent" because money is not just a medium of exchange. Money is an asset, a store of value.

Aside from the $789 billion economic stimulus program, most of this money has gone directly to banks and other financial market players in exchange for assets of questionable value.  The new money has left the banks in a slightly worse financial position than they were before. The banks are mainly holding this money so that they can present a good looking balance sheet to the stock market.

Credit is still shrinking which means that this infusion of money is not being spent.

Consumers, meanwhile, are saving. The assets of the banks and the hedge funds have been spared but our retirement accounts and our houses are plunging in value. Consumers want to accumulate safe assets, insured bank deposits - a.k.a. money.

Banks are not lending, we are not borrowing. Bank profits are coming from service fees charged on our accounts. Putting your money in the bank right now is like putting your money in your mattress, if your mattress happens to be infested with voracious silverfish.

Everyone is holding on to money which means that it is not being spent. If it is not spent then it cannot fuel inflation. Tom Campbell never struck Wonks Anonymous as a guy who would fail intermediate Macro. He is sorry to discover otherwise.