re: Hedge fund manager Daniel J. Arbess calls for direct money printing to Treasury

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I just can't possibly fathom how it would be any worse than what we've seen the last 5 years, and I also can't understand why a blank check for government to cut taxes until inflation arrives is any worse than a blank check to completely override the pricing mechanism for money & interest rates.

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Because the government would still indirectly affect the pricing mechanisms for money & interest rates, and at the end of the day it depends on who you give this authority to. Who would you rather have the printing press, the Fed or the government. Because if you allow this, you do in substance give this power to the government. I'm sorry, but I can't see how you think this wouldn't be worse than the past 5 years. Our budget deficit is actually decreasing now thanks to the sequestration and tax receipts. Be it as it may, the sequestration completely cuts future growth drivers (R&D) while not cutting growth headwinds (entitlements), but that's a different conversation.

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Like I always say, ZIRP is more dangerous than people think. This would be a more honest way to pay for government expenditure, in my opinion. It makes far more sense to just cut taxes across the board and make up for it with a counteracting inflation tax, rather than to pick winners and losers and subsidize the financial industry while creating odd pockets of asset price bubbles as the remainder of the economy continues to erode.

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ZIRP is dangerous, but giving government unlimited money is infinitely more dangerous. How is it an honest way to pay for expenditures is for them to have no consequences for expenditures? That makes no sense. So your point is to cut taxes across the board, give the government a free checkbook, then tax when inflation rises? That's under the assumption that politicans do what's economically right. Come on Doc.

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The CPI index fell from March to April this year for the first time since 2003. Things are not looking good.

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They aren't looking absolutely horrible either. That's kind of what we're in for a while. We have three distinct pockets in the global market: Negative growth in Europe (possibly Japan), Slower but positive growth in the US (possibly Japan), and higher growth in EM.