Only the timing in doubt Jun 30, 2009
First up this week, we cite former Federal Reserve chairman Alan Greenspan, writing in the Financial Times on June 26: "The US is faced with the choice of either paring back its budget deficits and monetary base as soon as the current risks of deflation dissipate, or setting the stage for a potential upsurge in inflation. Even absent the inflation threat, there is another potential danger inherent in current US fiscal policy: a major increase in the funding of the US economy through public... (Asia Times Online)
Staying Cool If Inflation Heats Up Jun 27, 2009
"The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10," he writes. Laffer, a respected international economist and author, then continues: "Yikes!" Yikes. (BusinessWeek)
From the USto Zimbabwe Jun 27, 2009
If you, too, are like me and have consumed a lot of various things so as to calm down enough so that your freaking brain doesn't explode at the Fed's astonishing, irresponsible government-lapdog excesses, then you are probably ready to know that, surprisingly, the monetary base abruptly contracted $46 billion, a hefty 2. 6%, in the last week or so, probably having something to do with the simultaneous $48 billion contraction in the recent $800 billion Federal Reserve addition to bank reserves,... (Asia Times Online)
WATCHING THE US PRINTING MONEY Jun 21, 2009
Dear J.S.: You'll want to keep track of the "Adjusted Monetary Base" that is put out by the Federal Reserve ... Economists say that the best way to track the monetary base is on the Web site of the St. Louis Federal Reserve ... Search for "monetary base." Then hit the button for "base.". (New York Post -- Business)
Welcome to the G-8world of illusion Jun 19, 2009
The monetary base has expanded from US$834 billion in May 2008 to $1,806 billion in May 2009, an increase of about 117. Such an expansion has never occurred in US monetary history. (Asia Times Online)
PAUL KRUGMAN: It's not time for business as usual Jun 18, 2009
Laffer seems panicked by a rapid rise in the monetary base, the sum of currency in circulation and the reserves of banks. But a rising monetary base isn't inflationary when you're in a liquidity trap ... America's monetary base doubled between 1929 and 1939; prices fell 19. (Fresno Bee -- Opinion)
Speculative gamesstage comeback Jun 17, 2009
However, monetary policy has been loosened unimaginably further since the crisis, with the monetary base being more than doubled. It is very clear that only evidence of rampant inflation - which we can expect the Bureau of Labor Statistics to suppress for as long as possible - will cause the Fed to return to an appropriately tight monetary policy. (Asia Times Online)
Gingrich, another comical choice for mouth of GOP Jun 16, 2009
gun961960 wrote on Jun 15, 2009 8:36 AM:" Food for thought:The debate over economic policy has taken a predictable yet ominous turn: the crisis seems to be easing, and a chorus of critics is already demanding that the Federal Reserve and the Obama administration abandon their rescue efforts. For those who know their history, its dj vu all over again literally.Skip to next paragraph Fred R. Conrad/The New York TimesPaul Krugman Go to Columnist Page Blog: The Conscience of a Liberal Readers'... (Helena Independent Record, MT)
Paul Krugman: For a full recovery, economic policies can't revert to norm Jun 16, 2009
Laffer seems panicked by a rapid rise in the monetary base, the sum of currency in circulation and the reserves of banks. But a rising monetary base isn't inflationary when you're in a liquidity trap ... America's monetary base doubled between 1929 and 1939; prices fell 19 percent. (Sacramento Bee -- Opinion)
Bad, and worseto come Jun 2, 2009
And so with all of this foreign money flooding into Treasury and agency debt, and all the new money pouring out of the Federal Reserve spigots, and then all this new money pouring out of the government spending spigots, it is not too surprising - although still more than merely terrifying - to see the monetary base jump to $1 ... 801 trillion, is monstrously up from one year ago when the monetary base was a mere $825 billion. (Asia Times Online)
* Green shoots or yellow weeds May 31, 2009
But if central banks dont find a clear exit strategy from policies that double or triple the monetary base, eventually either goods-price inflation or another dangerous asset and credit bubble (or both) will ensue. Some recent rises in the prices of equities, commodities and other risky assets is clearly liquidity-driven. (Taipei Times, Taiwan -- Business)
Day of reckoning for US dollar, US could lose AAA status... May 21, 2009
However, he said a big threat lurked in the country's expanded monetary base, which now stands at about US$1 ... While the expanded monetary base was needed to feed economic growth and ward off deflation under the Fed's quantitative easing plan, Mr. Ashworth said such high levels could fuel rampant inflation once broader monetary conditions improved ... He said it remained to be seen how much success the Fed will have when it decides to end its quantitative-easing plan and shrink the monetary... (The Drudge Report)
An inevitable blast May 7, 2009
While the enormous inflation in the money supply is already terrifying and causing me to scream, "We're freaking doomed!" even louder than ever before, Mr Murphy does not descend to such infantile crying and complaining, but says, "Normally, I do my best unshaved-guy-wearing-a-sandwich-board routine by showing the scary Fed chart of the monetary base. But every time I do that, some wise guy argues that I don't understand how our banking system works, and that because of 'de-leveraging' we are... (Asia Times Online)
Fighting Over Inflation Apr 20, 2009
The WSJ says that, "through the Fed's actions to rejuvenate the economy and the flow of credit, its balance sheet has ballooned, . Officials have discussed whether targets for the size of the Fed's balance sheet or the monetary base and reserves would provide some assurance that policy is pointed in the right direction,' " in Kohn's words. As described by Reuters, former Fed Chairman Paul Volcker challenged the vice chairman at one point. (Slate)
Help fromthe East Apr 18, 2009
- is more than the entire monetary base of the United States of one year ago ($826. 9 billion). (Asia Times Online)
Run on Banks Persistent Risk Without LPB Apr 16, 2009
The Federal Reserve has been printing money like crazy, adding more than $800 billion in the past year, doubling the monetary base ... If banks start lending again, and the Fed doesnt contract the monetary base quickly enough, our money supply will triple. (Bloomberg -- Columnists)
READ THE MINUTES: FOMC meeting of March 17-18 Apr 9, 2009
Members agreed that the monetary base was likely to grow significantly as a consequence of additional asset purchases; one, in particular, stressed that sustained increases in the monetary base were important to ensure that policy was consistently expansionary. Members expressed a range of views as to the preferred size of the increase in purchases. (USA Today -- Money)
Zimbabwe's shops fill up as foreign currency takes hold Apr 9, 2009
The government's present inability to print money has effectively reduced the country's monetary base, immediately putting a cap on price rises. Inflation, which was generally thought to be even higher than the official rate, followed many years of falling output after the government imposed price controls that made it uneconomical to produce. (Business Report, South Africa)
Tea party to protest stimulus Apr 8, 2009
"It was assumed that money was printed with nothing to back it, neutralizing the monetary base and causing inflation. Basically, it's nothing but paper money. That's what we're all upset about." Chase Rhen, one of the local organizers for the "Tea Party," said the protest is a peaceful effort, but noted that the event will not restrict how protesters express themselves. "It's about taking back our country and national sovereignty and state sovereignty," he said. (Pocatello Idaho State Journal, ID)
Even Drunken Sailors Have a Credit Limit Apr 3, 2009
According to Bill Beach of The Heritage Foundation, [T]he monetary base is rising by 1,492% since September 2008. That's a fifteen-fold increase. (Human Events Online)
We still owethe rich Apr 2, 2009
Anyway, as I am waiting and pondering writing some hate mail to the Fed, Congress and the Supreme Court ("Dear Morons: Drop dead! Sincerely, Angry Man In Florida (AMIF)"), the title of the article came up on my browser bar, and I saw, with alarm, "Fed Planning 15-Fold Increase In US Monetary Base", by Eric deCarbonnel, which was so horrifying that I immediately thought it must be some kind of a joke, an outlandish editorial cartoon, or something equally fanciful. Well, it wasn't, and he... (Asia Times Online)
How to save the world Mar 30, 2009
By reducing bond attractiveness (falling yields), while loading the banking system with cash (the Bank of England for instance wanting to expand the British monetary base very quickly by 80 percent), with no low-risk reasonable return investment alternatives available to them, the idea is to prompt banks to start lending again to more risky but also higher return borrowers. Initially, this wont quite work as banks will prefer to safely hoard cash/liquidity rather than start lending. (iAfrica.com)
Soros says commercial real estate to fall 30% Mar 27, 2009
"If and when credit is restarted, you would then have an incredibly swollen monetary base, which, if it were leveraged, you would have an explosion of inflation."Right now we are in a period of deflation, but it could easily tip over, where you are facing inflation. You are then faced with the prospect of draining money supply as fast as credit is created. (Boston Globe)
Should dollar be replaced as the world's main reserve currency? Mar 27, 2009
The impact on the monetary base of countries accumulating these reserves can lead to excess global liquidity and bubbles. Critics also say that the benefits which the United States enjoys as the printer of the premier 00004000 reserve currency also promotes global imbalances. (India Times)
Government should butt out of economy Mar 22, 2009
The Fed has doubled the monetary base and continues to add to it. There is no "shortage" of money; quite the contrary. (Athens Banner-Herald)
Paper: Is this the end of America? Mar 21, 2009
The total monetary base, already at astronomical levels, is now expected to take another big hit with the new Fed policy of buying up U.S. longer-term treasury bills in a bid to drive down long-term interest rates. Mr. Bernanke is sometimes known as Helicopter Ben because he once in an academic paper referred to the use of helicopters full of money to rescue an economy from deflation. (The Drudge Report)
A test of will Mar 20, 2009
And the monetary base (currency plus commercial bank reserves) has grown sharply in America, Britain and the euro zone ... But an expanding monetary base will not create inflation if the money is not lent out ... The Fed has explicitly described its goals as lowering the cost and improving the supply of private-sector credit; that this results in an expanded monetary base is secondary. (The Economist)
China central bank to sell 70 bln yuan of 3-month bills Mar 12, 2009
The move was aimed at maintaining a steady growth in the country's monetary base and keeping interest rates stable, said the People's Bank of China in a statement. Since the beginning of 2009, the central bank has increased the frequency of its three-month bill sales. (Xinhuanet, China)
SA faces a new evil Mar 9, 2009
Expanding the monetary base (through central banks buying commercial and government paper from the banks for cash) achieves nothing when banks prefer to hoard money rather than lend, and consumers want to save rather than borrow. The same applies to tax cuts and lower interest rates. (iAfrica.com)
Knowledge is the key to understanding Mar 9, 2009
The current monetary base expansion by the Fed and fiscal stimulus package of the government is taught to our students as the appropriate policy during a recession. The ideas are not new but rather concepts that have been taught and debated for over 75 years. (Waterloo-Cedar Falls Courier)
Stimulus Cash to Spur `Massive' Inflation, Commodity Rally: Chart of Day Mar 6, 2009
The government has created a massive increase in the monetary base, and it means we are entering a massive inflation cycle, Pento said in a telephone interview from Holmdel, New Jersey. Inflation will be intractable. (Bloomberg)
Now for something different Mar 6, 2009
But if the Bank of England can no longer lower interest rates, it can still raise the monetary base (cash and commercial-bank reserves), which gives it another way to boost the economy. The central bank has already started buying private-sector assets, such as commercial paper, in an attempt to get credit flowing again. (The Economist)
Q&A: Quantitative easing Mar 5, 2009
However, economists would still argue however that QE is the same principle as printing money as it is a deliberate expansion of the central bank's balance sheet and the monetary base. Why is it different from Weimar and Zimbabwe. (BBC News -- UK)
BoE cuts interest rates to 0.5 percent Mar 5, 2009
By buying the assets, the Bank of England will be expanding the monetary base and hopefully encouraging the banks to lend in the wider economy instead of just hoarding it. "In these highly uncertain times, there are merits to stimulating the economy through a variety of different channels," Bank of England Governor Mervyn King said in a letter to Treasury chief Alistair Darling seeking permission for the measure. (Yahoo News)
Democracy in Deficit Mar 4, 2009
This is because the Federal Reserve will be increasing the monetary base in the process and increasing the money supply. As Milton Friedman pointed out, inflation is always and everywhere a monetary phenomenon. (Human Events Online)
St. Louis Fed Analysis: Will the Expansion of the Monetary Base Lead to Inflation? Mar 4, 2009
St. Louis Fed Analysis: Will the Expansion of the Monetary Base Lead to Inflation ... St. Louis Fed Analysis: Will the Expansion of the Monetary Base Lead to Inflation ... ST. LOUIS, March 3 /PRNewswire/ -- The U.S. monetary base (the sum of currency in circulation and bank deposits at the Federal Reserve Banks) more than doubled in size in the last several months because of the Fed's unconventional responses to the financial crisis, including the purchase of private debt and billions of dollars... (PR Newswire)
National debt means bleak future for many Feb 25, 2009
As somebody alluded to earlier the monetary base has gone through the roof--it has more than doubled. Key interest rates are at or near zero. (Waterloo-Cedar Falls Courier)
* Changes are brewing for the euro zone, including Germany Feb 24, 2009
While the rest of the world recognizes that the way to counteract the collapse of credit is to expand the monetary base, Germany remains opposed to any policy that might carry the seeds of eventual inflation. Moreover, while Germany has been a steadfast supporter of European integration, it is understandably reluctant to become the deep pocket that finances bailouts in the euro zone. (Taipei Times, Taiwan -- Sports)
Fed Signals Determination to Avert Price Surge From Stimulus, Money Supply Feb 19, 2009
The step shows that Fed officials are intent on fulfilling their mandate to ensure price stability after the stock of money known as the monetary base soared 80 percent in the past six months ... The monetary base, the total money in circulation plus reserve deposits at central banks, has grown to $1. (Bloomberg)
The current state of the macro economy of Ghana Feb 19, 2009
Indeed, other than the year 2005, controlling money supply growth has been problematic in both the monetary base control period of 2000 and 2004 and the latter period of inflation targeting of 2006 to 2008. Notwithstanding the difficulties of controlling the money supply growth, the performance record in respect of inflation and inflation expectations have been commendable. (Ghana Web, Ghana)
Industrial Output, Homebuilding in U.S. Probably Fell as Slump Deepened Feb 18, 2009
By expanding the monetary base at an appropriate rate, the FOMC can signal that it intends to avoid the risk of further deflation and the possibility of a deflation trap, Bullard said in the text of remarks to the New York Association for Business Economics. Bloomberg Survey ================================================================ Import Housing Building Ind. (Bloomberg -- US)
Bank MPC voted 8-1 for 50 bps February cut Feb 18, 2009
The minutes indicate that the Bank is now ready to embark on quantitative easing where central bankers start raising the monetary base in an effort to boost demand -- as was practised in Japan earlier this decade. The Bank said creating money to buy gilts should raise private sector spending while buying commercial paper and corporate bonds should help boost the economy by improving liquidity in markets, allowing banks to offer more credit. (International Herald Tribune -- Travel)
St. Louis Fed Chief: Serious Risk of Deflation Feb 18, 2009
"While the monetary base has expanded at an extraordinary fast pace during the fall and winter, much of that expansion has been closely related to the Fed's lender of last resort function, and cannot be counted on to keep expectations of disinflation and deflation at bay.". "Because of this, the Fed needs a more systematic method of keeping the persistent component of monetary base growth rates elevated in order to combat the risk of a deflationary trap." ... He said the Fed could set... (Newsmax)
Printing money to boost asset prices? Feb 16, 2009
A third and less conventional way involves the Fed buying troubled assets from banks and the banks can be credited with cash that increases the monetary base. A fourth way used to recapitalise troubled financial institutions would be to inject cash into financial institutions in exchange for preference shares or shares in the financial institutions. (The Star Online, Malaysia -- Business)
Trillions From Heaven? Feb 14, 2009
3-percent increase in Americas monetary base (from $860. 6 billion on January 30, 2008 to $1. (CBS News)
Shining asnever before Feb 13, 2009
84 trillion, which is DOUBLE what it was last year, which demonstrates a huge, huge, HUGE increase in the monetary base, which is now at $1. 7 trillion, which is ALSO double what it was last year. (Asia Times Online)
Bank sees inflation at 0.5 percent in 2 years Feb 11, 2009
It noted that it had been given the powers to raise the monetary base to boost demand but said there were still uncertainties over the strength of these channels. . (International Herald Tribune -- Sports)
