Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson appeared before the Senate Banking Committee on Tuesday to talk about what they are doing to resolve the financial crisis.

Some lawmakers pointed out that their pricey bailout plans helped trigger a flight from the U.S. dollar and Treasury bonds Monday, along with the biggest one-day surge in crude-oil prices in Nymex history and a 5 percent jump in gold.

Here is the bet traders seemed to be making. The U.S. aims to add at least a trillion dollars in fresh debt to its balance sheet and has no way to pay it but by printing greenbacks, sparking runaway inflation.

There are problems with a long-term inflation bet. The global economic slowdown that helped crush commodity prices in recent weeks hasn't evaporated.

The relative weakness of other economies could put a floor under the dollar while keeping global inflation in check.

More important, credit still is being shucked off, with even Goldman Sachs Group and Morgan Stanley agreeing to trim the leverage that once juiced their profits. Deleveraging is typically deflationary.

It will continue to hit asset prices, from stocks to houses, as it has for the past several months.

That will flow to other prices, as well. The Japanese government propped up its financial system, too, but prices kept falling.

''The Fed and Treasury are merely cushioning the massive deflationary forces in the financial system,'' Merrill Lynch economist David Rosenberg told clients on Monday.