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"Anti-Keynesians," as our friends over at the Democratic Strategist gleefully argue, might not yet constitute a majority, but the sentiment is sure to pick up steam if the scenario Michael Pento envisions in "Austerity American Style" comes to pass:

The Fed and administration have now reached the point of diminishing returns. Whatever anemic and temporary growth that was generated by borrowing and spending printed money is now being superseded by rising prices. Any further monetary stimulation from this point on will only serve to send aggregate price levels surging higher, as GDP growth falls. The bottom line is that borrowing and printing money can never increase productivity and labor force growth, which are the only ways to increase real GDP. Government intervention can only temporarily circumvent the deleveraging process that is necessary for viable growth.

The government’s window to artificially drive real GDP growth by borrowing and spending has closed. The U.S. economy now faces another recession head-on, as the private sector deleveraging process resumes and the public sector deleveraging process begins. Alternatively, the Fed can keep expanding their balance sheet and sending the economy deeper into stagflation. The salient question for investors is whether the next recession will be accompanied by inflation or deflation. But only Mr. Bernanke can answer that.