Federal Monetary Insanity

Fact #1. Immediately prior to the Lehman Brothers failure, the Fed reports that the monetary base stood at $849.8 billion.

This past October 30, it was $3,607.7 billion. That’s an expansion of $2,757.8 billion — over $2.7 trillion.

Fact #2. This $2.7 trillion expansion has all taken place within just six years and one month.

If, instead, the Fed had continued to expand the monetary base at a normal pace (by the same amount as it had since 1961), it would have taken nearly 150 years to come this far. In other words …

With normal growth, the Fed’s recent $2.7 trillion monetary expansion would not have been achieved until the year 2158!

Fact #3. Prior to 2008, there were only two times the Fed embarked on extremely rapid monetary explosion of this type — first in anticipation of the widely feared Y2K bug; and later, in the aftermath of the 9-11 terrorist attacks. But as of the latest tally, the post-Lehman QEs have been

a whopping 43 times larger than the dramatic Y2K expansion, and …
an unbelievable 69.5 times larger than the Fed’s explosive reaction to 9/11.
The most alarming fact of all is this …

While the Fed has used crisis after crisis to justify its monetary madness, it has not yet begun to resolve the underlying diseases that gave rise to those crises. It has merely papered over their symptoms.


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