Gary Dvorchak at TheStreet.com says maybe so.
So far, the Fed has decided that allowing lenders to absorb all of the losses they created would wipe out our financial system, so by necessity, the losses are going to be borne by society at large.
The Fed is doing this by deliberately allowing inflation, “actions that return liquidity to the system but devalue the dollars in your pocket.”
Given the huge dollar amount of counterparty risk in the system should a major financial institution fail, then maybe the Fed has little choice. A serious collapse could trigger a domino effect worldwide.
What has changed lately is the number and volume of major financial figures who say we are on the brink of a potential cataclysm.
There is a classic benefit to inflation which makes it a big temptation to the incumbent: it makes it easier to pay back borrowed money. The trillions of dollars borrowed can be repaid with cheaper dollars.
As we know from history and common sense, inflation also has a negative impact on the economy. But for those in power, that may not be relevant.