The Federal Reserve's quantitative easing program of bond buying has, in its various iterations since it began in 2009, caused fears about runaway inflation as the Fed's balance sheet has ballooned and base money has expanded. "QE is by design set to be inflationary," says Michala Marcussen, global head of economics at Société Générale. "Yet we were asked several times last week whether the opposite could hold true; i.e. that QE is in fact proving deflationary." In a note to clients, Marcussen writes: In theory, a permanent increase in money supply results in a proportional increase in all money prices. Central bank ass ... (full story)