I think something has been left out of the discussion.
The multiplier effect of the credit.
The oodles of credit of the last while had already artificially inflated the money supply. All the new instruments (Credit Default Swaps (CDS), and so on) have been "invented", lots of wealth was created, yet the inflation rate has been under control.
Now the house of cards has fallen down, and this will result (has resulted) in the massive shrinkage of the money supply. Ongoing concerns need money and can't get it.
Feds are cranking out the money, and it is because they are fighting deflation.
Fear of deflation > Fear of inflation.
This isn't to say that anyone in this thread is wrong. With the added cash supply, all other things being equal this will result in inflation. But all other things aren't equal. Until the current credit crisis is averted, worrying about inflation is like worrying about your University grades while you are busy failing high school.
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