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Just weeks into the Obama administration, I wrote about how runaway spending could combine with a stagnant economy to lead to severe inflation. 

With the Fed expected to inject more money into the economy by buying up bonds when it meets next week, inflationary expectations are on the rise in the bond market.

As a result, for the first time ever on Monday, the government sold inflation-protected bonds for a negative yield. As the Wall Street Journal put it in layman's terms: "This suggests investors are so terrified of inflation that they’re willing to pay the government money every year to buy insurance against it."

The Fed is currently more concerned about deflation. But as we saw in the 1970s, it's quite possible to have both a stagnant economy and rampant inflation at the same. And the spending polices of the Obama administration make this more likely, because the federal government has to find buyers for all the debt it's issuing, or else the Fed will have to to jump in and print more money to purchase it.

To be sure, actual inflation could be years away. But things are certainly trending in that direction.