Monday, June 15, 2009
A picture is worth a thousand words.
So much much is a graph of the U.S. money supply from the Federal Reserve Bank of St. Louis worth?
This is the ROCKET SHIP TRAJECTORY growth of the U.S. money supply under Bernanke and Obama. Shocking to see in picture form, isn't it?
Can you spell H-Y-P-E-R-I-N-F-L-A-T-I-O-N?
The notion that Bernanke is going to sop up all this extra capital in circulation is a joke. He could never raise interest rates high enough with all the political pressure coming from the White House and Congress. Plus Fed monetary policy has never been that precise. The tools just aren't there. He's been given a teaspoon and asked to move a Lake Michigan into a bucket.
It is clear Obama and Bernanke are going to monetize the national debt. Even Dallas Fed President Richard Fisher is warning that it is possible, even likely. All those perky little dollars won't be slowed down by velocity controls or any other measure. Of all people Canada's finance minister Jim Flaherty is warning that the U.S. budget deficit is a threat to world economic recovery---and especially Canada's.
Take a look at that graph above again. Does this look like prudent management of the money supply to you?
Robert J. Abalos, Esq.
Posted by Team Effort at 12:30 PM