You might have noticed that Paul Krugman came out swinging at Peter Schiff and Austrian economics in his New York Times column this weekend. Peter responded to the hit-piece, explaining to Krugman why he’s declaring a Keynesian victory far too early.

Highlights from Peter’s response to Paul Krugman:

“Krugman really hasn’t studied the Austrian School at all. He isn’t familiar with it. He just criticizes it without really understanding it. Which probably explains how quickly he dismisses the advocates with the Austrian School. Even though he’s an economist with a Nobel Prize, he really hasn’t studied anything about the Austrian School. He’s heard some statements and he vaguely remembers what they were, so he throws together this… “maladaptation or something on the supply side” … Austrians aren’t supply-siders…

“As more people begin to figure out that it’s QE-infinity… that there is no easy way out… That’s when the game changes. That’s when the people that have been hoarding financial assets like bonds are going to try to cash them in to buy real things before the prices go higher. That’s when you could get this huge pick-up in the velocity of money, and you’re going to see the kind of runaway inflation that Paul Krugman thinks is impossible. He’s doing a victory lap prematurely. It’s kind of like George Bush’s “mission accomplished”…

“In the aftermath of the bursting of the stock market bubble, [Krugman] was advocating that the Federal Reserve do what it could to inflate a housing bubble… He didn’t forecast the housing bubble, he advocated for one. He wanted one. He thought it was good monetary policy. He thought what we needed was another bubble. We needed the wealth effect and if we weren’t getting it from the stock market, we needed to get it from the real estate market. So Krugman thought it was a good idea to have a housing bubble. He didn’t understand the ramifications. He didn’t understand the concept of malinvestments, that’s why he doesn’t know the word…

“The same thing is going on now. He advocated for massive inflation, QE, stimulus to get us out of the disastrous consequences of the bursting of the very bubble that he advocated be inflated to stimulate the economy after the previous bubble burst. And now he’s claiming victory…

“What is Krugman going to say when all of this falls apart? He’s just going to say we didn’t print enough money. But I don’t know what Krugman is going to say when there is a loss of confidence. When we have to go back to the QE well again, when we have to do QE4… When the dollar’s current rise reverses and we have a big surge again in commodities prices… Then all that confidence in the abilities of central bankers [evaporates]… we’re going to see a big increase in prices… It is way too early for Paul Krugman to be doing a victory dance…”