The Danger Point

Danger does exist of the means taken proceeding to unwholesome inflation.  If the Government does not carry out its intention of reducing its expenditure and so of balancing its budget, and makes up tremendous deficiency by borrowing, with a consequent continual emission of notes, the people would lose confidence in their currency, and there would be a flight from the dollar...

Interesting current events?  No, this is a quote from "The Sydney Morning Herald. - Mar 11, 1933" (http://tr.im/AzVK). In an article describing the government attempts to cause "wholesome" inflation.

At that point in our history, we were emerging from the great depression.  Deflation was countered with inflation of a sound money supply because federal reserve notes (dollars) were exchangeable in gold at the Federal Reserve Bank.

Today, we find ourselves in a  similar situation.  An asset bubble has burst and the government is attempting to reflate it by use of inflation.  The key difference today is that the government can't come out and say they are trying to cause inflation because Federal Reserve Notes are nothing more than paper and can not be exchanged for gold.  All they can do is print more and hope that no one notices that they have no intrinsic value like real money.