The following chart illustrates the Excess Reserve Balances. The parabolic increase would be indicative to most economists and bread-and butter
finance types that massive hyperinflation is on the way, due to the sudden "snap" creation of money by the Federal Reserve and the injection thereof
into banks:
Interestingly enough, This article's take on
things is that despite the roll-the-printing press policy is offset by deflationary presures from massive credit destruction, and that the cash
is sitting in banks. Banks, so the theory goes, are basically being rewarded by the Fed in the form of interest rate manipulation and other methods
for NOT lending the money out. Thus, the theory goes, the money sits in banks rather than being lent out, so the ultimate inflationary effects are
small to nil, and certainly not enough to compensate for the massive and ongoing credit contraction across the planet.
I'll let you make up your own minds on the issue...
|
That's well beyond even exponential growth. What's visible there is the equivalent of a sample heart rate of someone strapped to an electric chair.
Usually that kind of stimulation leads to death (or so common sense would say).
|
reply to post by Evasius
I like your timewave zero chart. We're in a novelty gully alright...strange days indeed. This is a weird time to be involved in finance or trading,
never mind coping with precious metals, grain futures, etc...complete insanity on all levels.
I notice in your signature chart there were several other periods where the novelty level was similar. Out of curiositym do you know what those were,
offhand?
|
Hi boys and girls! Uncle Thunder is back with another one to contemplate. That's an awfly big, hairy, and ugly piper. Wonder who is going to pay it,
and when. And with what, when it really comes to it.
Never mind whatever forms of massive debt-based economic spending our activist government sees swirling around in its pipe-dream smoke.
[edit on 9/18/09 by silent thunder]
|
|
The rest of the world doesn't want an additional half-trillion dollars worth of Treasury securities each year; it doesn't want the Treasuries it now
has to own. Households can't continue to put a trillion dollars worth of Treasuries away per year - that's 8% of all personal income.
That leaves the Fed and the banking system. The central bank bought Treasuries during the third quarter at an annual rate of nearly $700 billion, and
provided nearly zero-interest money to banks and broker-dealers, who bought a good deal more. The Fed is buying much more than Treasury securities, to
be sure; during 2009, it bought a remarkable $700 billion of mortgage-backed securities in a fruitless attempt to stimulate the housing market.
Source:
www.atimes.com...
The following chart shows Federal Reserve total securities holdings.
|
