The Federal Reserve met today and announced that it would spend a relatively small amount of money buying more government debt. The Fed is not sounding as optimistic as it did a couple of months ago. After the announcement, the stock market recovered some of its losses and the interest rates on bonds went down further. You can now get a 30 year fixed-rate mortgage for 4.5% or less.
While this announcement was not insignificant and it certainly symbolizes that the Fed is still worried about the economy, it was not a drastic move. A drastic move would have been an announcement that the Fed would start forcing banks to lend their excess reserves.
This whole thing goes to show that hyperinflation will probably not happen. The word hyperinflation is thrown around casually quite a bit these days. Hyperinflation basically means the destruction of a currency. In our modern world, with a high division of labor, hyperinflation could mean death and destruction if there are no competing forms of money at the time (as is the case now because of legal tender laws).
The Fed and the people working there may be stupid, but they aren't that stupid. They could force the banks to lend and all of this talk about deflation would go out the window. We would see massive inflation in a short period of time. The Fed is not ready to go there yet and it may never go there. While the Fed tries to accommodate the politicians and the bankers, it probably will not risk destroying the currency. If the Fed destroys the currency, it destroys itself along with it.
Prediction: The Fed will inflate and we will see high price inflation, but just like the late 70's and early 80's, the Fed will tighten up and let interest rates rise. We will see a worse recession/depression than the early 80's. We will not see hyperinflation.
If the above prediction is wrong and we do get hyperinflation, then the people at the Fed really are that stupid and we will all pay for it dearly.