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Economies typically do not function well in hyperinflation. The real value of government debt might disappear, but the economy is likely to disappear with it.

It is understandable that the Fed injects cash to avoid the collapse of the stock market, but basically it is bad policy for monetary authorities to intervene to save speculators from bankruptcy. This is not their role.

The Fed should make a clear commitment to stable money to reduce the swings in interest rates and inflation. Instead, it champions and flaunts unstable money. This encourages momentum trading and the growth of derivatives. Meanwhile, layers of financial regulation make Washington bigger and more powerful but don't fix the underlying problems.

True enough, the Fed needs radical reforms. In particular, it needs to replace its failed forecasting models and be rid of the academics who overwhelm the Fed system.

Hyperinflation can take virtually your entire life's savings, without the government having to bother raising the official tax rate at all.

The central focus of what we are doing at the Fed is to keep inflation from accelerating - and preferably decelerating.

The reason I am so negative about the Federal Reserve's policies is that they only target core inflation and argue that they can't identify bubbles, but when each bubble bursts, they flood the system with liquidity that brings about unintended consequences.

If Congress wanted to intervene with the Federal Reserve, well, we created the Federal Reserve. We could uncreate it. But would you want Congress regulating the money supply? We'd have drowned in inflation, or gone bankrupt, decades ago.

Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they're likely to increase prices, since they've learned that if they don't, and inflation hits, their businesses will be wrecked.