Monday, Mar 23, 2009
PP: Fed Planning 15-Fold Increase In US Monetary Base
The Economic Voice: The fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion
Whether expressing approval or concern over the fed’s intentions, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base because they don’t take into account the amount of dollars circulating abroad. in US monetary baseThis 15-Fold Increase will be impossible to reverse
Next September, when the fed realizes it has gone too far and tries to reverse its balance sheet expansion, it will be unable to do so.
Posted by troy @ 10:42 AM (409 views) Add Comment
4 Comments
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1. 51ck-6-51x said...
Why not link to the article itself?
This article fudges the numbers (assumes no new money finds itself in foreign domiciles, assumes all new money gets into general circulation, plus more smaller fudges) and ignores the devaluation of all of the toxic waste that is still to come. I think $300bn is nothing compared to the other side (devaluation; more defaults; less recovery), especially when considering the likelihood to hoard whatever new money comes one's way.
Sure there are inflationary pressure being built, but there are huge, existing deflationary pressures too. Are the central control's efforts really going to produce increased inflation or will it actually be like peeing into the wind?
I think we will have a period of deflation (not as 'bad' as it would have been) followed by a rapid increase in inflation along with central banks attempting to curb inflation by raising interest rates pretty sharply. No doubt troy will think I have been led down the garden path by the media & government.
2. troy said...
666 thank you for taking my post seriously
"No doubt troy will think I have been led down the garden path by the media & government."
I don't need to
you said
" think we will have a period of deflation (not as 'bad' as it would have been) followed by a rapid increase in inflation along with central banks attempting to curb inflation by raising interest rates pretty sharply."
says it all
3. troy said...
oops I nearly forgot
they don't create the interest
therefore constant boom & bust
4. 51ck-6-51x said...
troy I value almost all posts (sometimes I ignore them due to time restrictions however) and I certainly value your posts more than a three liner in the metro with no substance.
You will see from other posts by me, that although I am a capitalist I agree with you on many things - I am not a consumerist and not a run-of-the-mill capitalist. I believe that the central bank system is badly flawed and that the link between government & market is inherently bad for both the democratic system and the free market system... have a read about anarcho-capitalism and liberalisation (Do you read Alex Jones' infowars?)
(I'm off out now but will make sure to check for response tomorrow).