“The potential for a national bank run is real. The Federal Deposit Insurance Corp. has $35 billion in reserves to cover some $4 trillion in potential liabilities. A massive run would require the Fed to print the difference. This would trigger hyperinflation and justify running to spend one’s money before prices rise. The Federal Reserve has been printing money like crazy, adding more than $800 billion in the past year, doubling the monetary base. It’s printing another $1.2 trillion to buy long- term bonds. If banks start lending again, and the Fed doesn’t contract the monetary base quickly enough, our money supply will triple. If this doesn’t spell inflation, nothing does.”
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