The Federal Reserve is inflating the money supply at 341% per Annum

October 27, 2008 by · Leave a Comment
Filed under: Economic News 

Just wanted to post a link to this writing on Gary North’s website. He has gathered some statistics together that is showing this huge expansion of our monetary base. If you look at this picture below, it looks like a hockey stick. If we use the fractional reserve system at a 9:1 or 10:1 ratio then we can see that this adds up to around $3 trillion dollars of additional credit. The nice little fact the Ben and Hank are failing to tell us is that this operation is non-inflationary (sterile) only if you can get face value at the time you purchase these bad assets or equity stakes. If you can not get the full value then you have issued money for overvalued assets and then you devalue all outstanding dollars by that amount. We are now going down a slippery slope that history shows, ends in the same way, inflation then deflation. Good luck.

Federal Reserve Inflates Monetary Base 341% (per annum)


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