Tag: "monetary base"

The Fed Has Not Been Printing Boatloads of Money

As I listen to commentary on cable TV about the Fed’s quantitative easing, I find it amazing that people smarter than I, as well as better trained and more knowledgeable about many things, keep making the same mistake they have made for the past three or four years. Their predictions of an inflationary break-out and/or […]

Where Is The Inflation?

Going through some newspaper clippings the other day, I ran across an opinion piece in the Wall Street Journal titled, “Get Ready for Inflation and Higher Interest Rates.” The fourth paragraph is quoted below: “But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect […]

The Fed’s Balance Sheet and Inflation

I sat in on a presentation this week where a picture of the Fed's balance sheet growth was shown as prima facie evidence that inflation looms down the road. The presenter wasn't sure when inflation would arrive, but it would arrive and be caused by the balance sheet expansion. No chain of causality was laid […]

Money Supply Growth

If the money supply increases 10 percent in 3 months, we call it a 40 percent annualized increase. If it flattens at three months and is at the same level 3 months after that, it becomes a 20 percent annual rate for the 6 months. Six months later, if money growth remains flat, it becomes […]

The Fed’s Balance Sheet and Excess Bank Reserves

People keep talking and writing about the explosion of the money supply and the coming inflationary tsunami. Let me point out once again that the M1 and M2 measures of the money supply spiked but have since come back down. There is no explosion of the money supply. I The monetary base (currency outstanding plus […]

Purchasing Treasuries, Printing Money, And Runaway Inflation

I've tried to straighten this out before, but it obviously didn't take; so I'll try again. Over and over on financial TV, I hear commentators and guests alike talk about how the Fed is printing money when it buys Treasuries (meaning long-term) and how runaway inflation is the inevitable result. *The Fed doesn't literally print […]