After a tremendous hiccup inflation is today at an all time high. CPI-W has grown rapidly over the past half year. It is growing very rapidly (dangerously?) so far in 2011. It is near certain that the rate of inflation over the next few months will be significantly above trend. Historically, periods of rapid (5+%) inflation are met with periods of recession. The related conditions that bring economic crisis are excessive monetary policy, war and or an energy shock.
All four of these conditions are met today. In other words, we are asking for trouble. How Mr. Bernanke can avoid seeing how all these stars are lining up is a mystery to me.