Bernanke defends new Fed plan to boost economy - Yahoo! News
German Finance Minister Attacks Fed Move Again : Report - ABC News
What will this do to the U.S. economy? Will it cause inflation or stagflation? If so, what is the best way to prepare for it?
An increase in monetary supply will cause a decrease in the dollar purchasing power. However, depending on what other countries and the EU do with their currency, the effect may be minor.
Germany does not want to see a weak dollar because this makes German exports to the US less favorable in the US market.
The best way to prepare for it depends on what you mean. If you are looking to make money, run a business, sell property, buy assets... My specialty is on investing specifically with stock.
Assuming you want to take advantage of the best and worst case situation here. Personally I feel gold is in a bubble formation, so I would stay away from gold right now. If you have to own metals, platnium or silver are better plays. There is a new precious metal ETF GLTR which has gold, silver, copper, and a few other metals. Mix that with international currency such as FXE or a mutual fund which specializes in multinational government bonds. As these currencies will see the benefit of a lower USD, and pay dividends.
Go long with DIA, SPY, QQQ, DVY, OMC, XOM, MO, KO, PEP, APPL, and hedge by buying some out of the money LEAP put options on DIA, SPY, QQQ.
If you think inflation is going to be a long term problem look into funds that short the US Tbills.
If you think that things will really crash, buy VIX or DOG.
IF you want to play it safe and just store your wealth, buy TIPS from the US government, or in and ETF or Mutual fund.