In a somewhat convoluted fashion (at one point he discusses issuing a trillion dollar platinum coin to payoff debt), he pretty much admits that price inflation is a real threat and that the Fed will have to fight it by shrinking the money supply. He writes (my bold).
It’s true that printing money isn’t at all inflationary under current conditions — that is, with the economy depressed and interest rates up against the zero lower bound. But eventually these conditions will end. At that point, to prevent a sharp rise in inflation the Fed will want to pull back much of the monetary base it created in response to the crisis, which means selling off the Federal debt it bought.Thus, the most that Krugman can argue is the timing of developing price inflation threat, and perhaps severity. But, is Krugman more concerned than he lets on? Has he planted this inflation warning so that he can in the future point back and say, "Yes, as the start of 2013, I was fully aware that inflation would come to haunt"? And then blame accelerating price inflation on the failure of the Fed to respond in quick enough fashion?
Further, does he seriously think the Fed is going to be able to "pull back" on the monetary base, without massive upheaval in the bond market? Here, Krugman is missing the BIG upheval that's coming, even though he may be starting to fear the price inflation.