While Austrians (you know, those know-nothings who created a business cycle theory Paul Krugman doesn’t like — or understand) are ripping the latest reckless move by Ben Bernanke and the Federal Reserve System, the Fed’s actions do meet approval by (Who else?) Krugman.

Yes, Krugman thinks that the Fed’s decision to “create” a trillion dollars of new money out of thin air is inflationary, and he thinks that is just great. Read on:

The Fed is, however, creating a new liability: the monetary base it creates to buy these bonds. In effect, it’s printing $1 trillion of money, and using those funds to buy bonds. Is this inflationary? We hope so! The whole reason for quantitative easing is that normal monetary expansion, printing money to buy short-term debt, has no traction thanks to near-zero rates. Gaining some traction — in effect, having some inflationary effect — is what the policy is all about. (emphasis mine)

However, the Nobel Laureate does worry that maybe inflation in the future might not be such a good deal:

The problem may come when the economy recovers, and inflation starts to become a problem rather than a hoped-for outcome.

Hey, Krugman, you don’t have to worry about that, as there is not going to be a recovery, or at least not a recovery anyone can recognize. With the government trying to further distort the structure of production (something Keynesians like Krugman fail to acknowledge as even existing) via inflation, and with the tax and regulatory policies forcing up business costs, the economy will have a difficult time rising to meet former levels of production.

Still, I find it absolutely pathetic that the supposed star of the economics world has no concept at all about the destructive nature of inflation. The guy really believes that debasing the currency is a good thing. That must be the upshot of an MIT education these days.