On September 13, 2012, when the Federal Reserve Open Market Committee decided "[T]o increase policy accommodation by purchasing additional agency mortgage-backed securities at a pace of $40 billion per month[,]" the reactions ranged from exuberance to horror. The exuberance showed itself in the stock market, and the horror came from anyone holding dollar bills for the long term. Jim Grant sent his condolences to the lab rats. Marc Faber said his goodbyes to the middle class. Although the Federal Reserve has hammered more nails into the coffin of the U.S. dollar's purchasing power, let's not loose focus on the bigger inflator: the People's Bank of China. What does US$40 billion a month look like? The PBC is very familiar.
Comment: There is not much market turmoil because all main markets flood the system with money. It makes not much sense to move out of the dollar when the euros, yens and yuans are also getting inflated and sometimes even more than the dollar. The current dullnes in the currency market is the proverbial tranquility before the storm.