Hyperinflation or Raising Interest Rates?

There has been ongoing uncertainty about whether the federal reserve would use monetary policy to create one or more of following outcomes to deal with the financial crisis:

1) Allow Hyperinflation – as the fed continues to expand the money supply, long term treasury auctions fail to receive buyers (eg. foreign investors don’t trust they’ll be paid back in non devalued dollars), inflation would naturally occur. 


2) The Federal Reserve will Increase Interest rates (called the "overnight rate") – this will be used to as an indirect means to restrict money supply.  Specifically, banks will receive "increasingly expensive" money and will likely cut off many high risk borrowers/restrict borrowing to only the best candidates.  

The Federal Reserve via Ben Bernanke provides an argument for a slower policy to protect consumers while indicating his preference for option 2):



Either way, private banks have phenomenal power to shift policy, despite the Fed’s decisions.  In particular, the massive Credit Default Swap market will change the landscape of world economics.  "The value of the credit default insurance market is now much larger than the domestic stock market, mortgage securities market and United States Treasuries market" (source).

Facebook Friend Connect & Google’s Open Social Will Empower the Sixth Sense

I believe technologies similar to the following will empower the most significant changes to the internet evolution:

1) Google’s Open Social platform, which provides a universal method of connecting among social websites broadcasting stories to facebook from anywhere on the web;
2) Facebook’s Friend Connect platform, which allows people to broadcast their stories to facebook from anywhere on the web and
3) Mobile applications that take advantage of social behavior

I believe technologies including but not limited to those listed above will empower a "sixth sense" where user will have significantly more relevant information about their environment.

I borrowed this concept from the demonstration in the following video: http://www.ted.com/index.php/talks/pattie_maes_demos_the_sixth_sense.html

Increased information is a revolution.  Of course, this raises privacy concerns.  However, if managed responsibly, this can create massive new efficiencies for mankind.