Hyperinflation

I read this and am impressed with the logical progression. I haven't really seen it laid out and with the difference between hyperinflation and inflation it seems really convincing. There is a big problem though - where does the money come from? The fed printed it, you say? Well, no, they didn't actually print it. They made it available for banks to lend out. Tried getting a loan lately?

People are tapped out, who has the money to go speculating into hard commodities? If no one has any money to buy these commodities, how high can they get? Going to get a bank loan for some silver? Good luck. Think about it, everyone is already just scraping by as it is. Are they suddenly going to go rush out and stock up on gasoline? Or are they going to stop driving as much en masse and buy up Priuses - like oh that last time oil shot up to 150 for no reason.

Here's what I think is going to happen instead. Worried inflationistas will continue to hedge into commodities, predicting Lira's scenario. The prices may very well rise, even balloon for a while until, well until the next report comes out that sees stockpiles have risen because no one in the end market is buying it. Because they can't. There's no extra money in the economy, no one will suddenly get a raise to go get their hands on pork bellies. The money on the Fed's balance sheet will stay right where it is because no bank is going to lend anyone money to speculate in commodities. Then they will come crashing down again and everyone will go back to treasuries and we may have another bad quarter or so with more deflation worries until QE3. This scenario will happen several times over the next 1 to 3 years until the economy recovers on it's own.

Update
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Another point that Lira's argument hinges on is that government can do nothing right. I'm not one that believes government is perfect, far from it, but I don't believe anything is. Every system has problems - including unfettered free markets. Government has been growing the entire time America went from being an "also-ran" to the dominant economic force in the world. When you let blind ideology guide your decision making you will make mistakes. Lira DEPENDS on the Fed making mistakes - not seeing inflation and fueling it by printing dolalrs. He then fails to deliver on "printing dollars". There is a complicated mechanism to "printing dollars", but he assumes you think they've already been printed - they haven't. The Fed can simply make those dollars not available to loan, and it's unlikely the banks will loan it anyway.