Can the Fed Keep Printing Money? Yes, the government and the Fed can keep printing money, but the debt is still debt. They can keep inflation low by buying Treasuries, but what happens to interest rates when they eventually have us go bust? Can you imagine what would happen to the housing market if all of a sudden 3.8% mortgages jumped to 7%? Ouch! A spike in interest rates would actually help regular savers, though, so maybe the broader economy would not get hit all that hard. Who knows? It is a baffling economy, however, and it is not one driven by "free markets." It is driven by the Fed, and it is a head-scratcher as to where this all leads. But let's just take a break and enjoy the fact that stocks have soared as much as they have. Granted that some of the "too big to fail" banks did not deserve the bailouts they received, but as the Fed and Congress has repeatedly said, we avoided "something worse." Ben Bernanke was a student and professor of the Great Depression, and he vowed to not have us repeat that dark time. It has worked amazingly well, but Gentle Ben will likely be consulting at Goldman Sachs before we eventually find out if the strategy (which critics call a massive Ponzi scheme) actually worked. Is inflation coming soon, or have they kept it caged in the Fed's massive balance sheet. Who knows, but investors do not seem to be worried at all, as evidenced by the record close Friday for the S&P 500. Spring is here, college hoops are in action, and everything feels good right now.