Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

Skip to comments.

How The Fed Is Hiding Hyperinflation
Watcher of Worldlings ^ | 3/5/2010 | Chris van Avery

Posted on 03/05/2010 1:09:25 PM PST by SolitarySaint

And last, but certainly not least, an analyst at ZeroHedge notes how the Federal Reserve is cooking the money supply books to hide what appears to be hyperinflation:

From December 2002 until the collapse of Lehman Brothers in September 2008, the quantity of deposit currency created by the Fed averaged $11.8 billion, an amount that is relatively insignificant compared to total M1. Presently, it stands at a record high of $1,246.2 billion, which of course is highly significant.

More to the point, none of this deposit currency is captured in the traditional definition of the Ms. The quantity of dollar currency is therefore significantly underreported, which is illustrated by the following chart.

(Excerpt) Read more at watcherofworldlings.blogspot.com ...


TOPICS: Business/Economy; Politics
KEYWORDS: bush; economy; obama; politics
I 'bout fell out of my chair when I read this. Our money could be worth half of what it was in the not-too-distant future.
1 posted on 03/05/2010 1:09:26 PM PST by SolitarySaint
[ Post Reply | Private Reply | View Replies]

To: SolitarySaint

Well, my understanding is that if the Fed and the government get the entities they’ve paid out to to pay them back, both the debt from that, and the “temporary” great expansion of the money supply, will largely reverse this.

Of course, it also helps to suck “excess monies” out of the economy by taxing the heck out of everything. Most will again to toward “reducing debt” and the rest will go to the trash bin at the FED as it undoes its excess expansion that way.


2 posted on 03/05/2010 1:14:44 PM PST by ConservativeMind (Hypocrisy: "Animal rightists" who eat meat & pen up pets while accusing hog farmers of cruelty.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SolitarySaint

$10 a gallon gas, $20 a pack cigarettes, $10 gallons of milk. Yes, we can !

We’ve seen how delicate it was before. Let us not forget !


3 posted on 03/05/2010 1:15:15 PM PST by Celerity
[ Post Reply | Private Reply | To 1 | View Replies]

To: SolitarySaint
The Fed is attempting to stop deflation by inflation. The housing market and commercial property collapses wiped out a lot of wealth. The Fed is trying to prevent a deflationary recession by inflating the dollars, which will probably have disastrous affects.
4 posted on 03/05/2010 1:20:00 PM PST by In veno, veritas (Please identify my Ad Hominem attacks. I should be debating ideas.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: ConservativeMind

While the intent of the TARP program was for the repaid bailouts to buy back debt, that’s not how Congress is actually using the recouped funds.


5 posted on 03/05/2010 1:22:53 PM PST by SolitarySaint
[ Post Reply | Private Reply | To 2 | View Replies]

To: SolitarySaint

It hasn’t been hidden from me. Food and other necessities reflect it. For example Toilet Paper has already gone up 39%and milk 33%. Just to name a couple.


6 posted on 03/05/2010 1:27:05 PM PST by greeneyes (Moderation in defense of your country is NO virtue. Let Freedom Ring.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: In veno, veritas

It may be “economy neutral” to just print up a bunch of money to replace what was lost in the melt down but most of the “new money” isn’t in the hands of the folks who lost value in the melt down. So essentially what we have seen is theft. Oh, I’m sorry, “redistribution”, yeah, that is what we call it now...


7 posted on 03/05/2010 1:46:08 PM PST by wastoute (Government cannot redistribute wealth. Government can only redistribute poverty.)
[ Post Reply | Private Reply | To 4 | View Replies]

To: greeneyes

bottled water has went up about 40% where I am....a can pringles was a dollar, now a 1.50....yep that’s Obama deflation...


8 posted on 03/05/2010 1:48:43 PM PST by Freddd (CNN is down to Three Hundred Thousand viewers. But they worked for it.)
[ Post Reply | Private Reply | To 6 | View Replies]

To: greeneyes

Don’t forget the NECESSITY of ammo for which prices have skyrocketed and supplies have dwindled .


9 posted on 03/05/2010 1:50:10 PM PST by Renegade ("Bring it on while I still don't need glasses to shoot your eye out ")
[ Post Reply | Private Reply | To 6 | View Replies]

To: Freddd

Buy a Brita and filters . You’ll save on the water and it will taste better.


10 posted on 03/05/2010 1:51:14 PM PST by Renegade ("Bring it on while I still don't need glasses to shoot your eye out ")
[ Post Reply | Private Reply | To 8 | View Replies]

To: SolitarySaint

It would not surprise me, as it and worse are expected.

What we Freepers, free people and allies need do is to develop alternate forms of liquidity that can avoid government scrutiny, and are honest measure. I have pondered how to do this, and am at a loss.

Certainly there are forms of barter currencies to be found, and other forms of supposedly metal backed currency.

I was hoping that quantum storage devices would have mooted this step — because theoretically such devices once extant would immediately allow untraceable forms of currency, and be completely honest, at least on the information side.

An alternative might be a coinage of a sort that contain registered amounts of rare isotopes.

In any case it seems such a radical invention/innovation is needed NOW.

The Federal Government is at this point mostly criminal and may be very soon totally criminal.


11 posted on 03/05/2010 1:55:30 PM PST by bvw
[ Post Reply | Private Reply | To 1 | View Replies]

To: In veno, veritas

Exactly, they’re battling deflation. Deleveraging in banking and the unwinding of massive securitization also left a whole in the money supply for them to compensate for.


12 posted on 03/05/2010 1:58:36 PM PST by 9YearLurker
[ Post Reply | Private Reply | To 4 | View Replies]

To: Renegade
Love the Brita, I also got the new zero water filter, it's more expensive, but does taste better.

A little digital ppm meter comes with it(that's what sold me, being a gadget freak), I get 160ppm out of the faucet (we have basement wholehouse 10-20 micron string filter, this helps the other filters last longer), 30-40 ppm form the Brita and 0 ppm from the Zero.

Ironically, coffee still taste better with the Brita, guess you need a little crap to help pull a good brew.

13 posted on 03/05/2010 1:58:49 PM PST by norraad ("What light!">Blues Brothers)
[ Post Reply | Private Reply | To 10 | View Replies]

To: greeneyes

Pet food and lots of other stuff is going way up.


14 posted on 03/05/2010 2:02:37 PM PST by autumnraine (You can't fix stupid, but you can vote it out!)
[ Post Reply | Private Reply | To 6 | View Replies]

To: norraad

To get the point across about what is put in the local water supply, I used to do an experiment with the kids in my science class. .I would give them some local water that went through the Brita. Then I would give them the same water straight from the tap. The look on their faces was something to behold.


15 posted on 03/05/2010 2:30:09 PM PST by Renegade ("Bring it on while I still don't need glasses to shoot your eye out ")
[ Post Reply | Private Reply | To 13 | View Replies]

To: Renegade
I know, I do that too.

Folks, in general, will drink more water if it taste good to them.

We all, pretty much, need to drink more than we do(water that is).

But so often it's just not, umm, umm good, so we grab a soda (HFCS damage ,etc.) or eat something when all we really needed was a good drink (of water).

16 posted on 03/05/2010 2:37:58 PM PST by norraad ("What light!">Blues Brothers)
[ Post Reply | Private Reply | To 15 | View Replies]

To: SolitarySaint

The problem isn’t hyper-inflation. The problem is worse: deflation.

The destruction of credit. The slower speed of money.

Falling wages. Falling employment. Falling stocks. Falling home prices.


17 posted on 03/05/2010 2:40:08 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
[ Post Reply | Private Reply | To 1 | View Replies]

To: SolitarySaint

Have you kept track of prices in the grocery store? Over the last year I have noticed the prices of the things we buy going up a tad every week and “sales” tend to be when this week’s price is the same as last week’s.


18 posted on 03/05/2010 2:42:07 PM PST by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Southack; arthurus

I wish everyone would make up their minds! Hyperinflation... deflation...

I don’t know whether to pay off my debts or get a loan! ;-)


19 posted on 03/05/2010 2:45:16 PM PST by Pining_4_TX
[ Post Reply | Private Reply | To 17 | View Replies]

To: SolitarySaint
The Fed actually publishes something that is the close equivalent of M3. Have your air sickness bag ready Institutional Money Funds
20 posted on 03/05/2010 2:45:43 PM PST by Timocrat
[ Post Reply | Private Reply | To 1 | View Replies]

To: Pining_4_TX

Inflation is increase in the money supply. People who don’t understand that or who are more interested in manipulation have many ad hoc and mutable definitions of inflation/deflation and mostly either do not understand economics(this includes many who make their livings as “economists”) or are pushing ideologies or just want people to think they are smart.


21 posted on 03/05/2010 3:04:21 PM PST by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Renegade

We are on a well in the mountains. When we do venture into a large town and they drink water that is from a fountain or a tap, the look on their faces is hysterical. They can’t believe people drink that all the time!


22 posted on 03/05/2010 3:10:17 PM PST by autumnraine (You can't fix stupid, but you can vote it out!)
[ Post Reply | Private Reply | To 15 | View Replies]

To: norraad

Actually, the more mineral filled the water is, the better the coffee. I think it has to do with the ‘crap’ clinging to the coffee grounds for longer and making a richer cup of coffee.


23 posted on 03/05/2010 3:11:39 PM PST by autumnraine (You can't fix stupid, but you can vote it out!)
[ Post Reply | Private Reply | To 13 | View Replies]

To: arthurus

Yes, but the **MONEY SUPPLY** is all cash plus all credit. Here we are in the largest credit-based economy in world history, and some people still forget the entire *credit* half of the money supply when checking to see if the money supply grew (inflation) or shrank (deflation).

Hey, the cash grew! Oops, the credit shrank. Which event was larger?


24 posted on 03/05/2010 3:12:11 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
[ Post Reply | Private Reply | To 21 | View Replies]

To: Pining_4_TX

“I don’t know whether to pay off my debts or get a loan! ;-)”

I don’t think anyone else knows either. They just throw a dart and guess.


25 posted on 03/05/2010 3:12:46 PM PST by autumnraine (You can't fix stupid, but you can vote it out!)
[ Post Reply | Private Reply | To 19 | View Replies]

To: Southack

Not credit. Credit is gas. It is not inflation. It is not part of the money supply and counting credit just obfuscates the whole thing and makes it impossible to forecast or analyze anything based on the money supply. It is a straw man.


26 posted on 03/05/2010 6:01:40 PM PST by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: arthurus

Nope. We have a credit-based economy. So does Japan. Japan has printed vastly more money than has the U.S., yet Japan has been stuck with deflation since 1989.

Japan has lost 21 straight years to deflation. Why? Credit destruction.


27 posted on 03/05/2010 7:39:47 PM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
[ Post Reply | Private Reply | To 26 | View Replies]

To: arthurus

“Inflation is increase in the money supply.”

I know, but that still doesn’t answer my question...

Should I pay off my debts or take out a loan? ;-)

Might as well have a bit of fun with this - better than crying.


28 posted on 03/08/2010 8:03:50 AM PST by Pining_4_TX
[ Post Reply | Private Reply | To 21 | View Replies]

To: Southack
I don't consider myself a Bernanke fan, but my understanding is that he is an expert on the Great Depression and that his conclusion has been that deflation is the worst possible problem -- and that FDR failed to sufficiently inflate the money supply to combat deflation. As far as I can see, Bernanke is pushing hard in the direction of inflation and hoping that he can thereby achieve stability (deflation and inflation canceling each other).

I don't know if it's possible, but it seems like this is what he's trying -- so we have signs of deflation and inflation simultaneously.

29 posted on 03/08/2010 8:09:47 AM PST by ClearCase_guy (We're all heading toward red revolution - we just disagree on which type of Red we want.)
[ Post Reply | Private Reply | To 27 | View Replies]

To: ClearCase_guy

Debt is deflationary.


30 posted on 03/08/2010 8:30:47 AM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
[ Post Reply | Private Reply | To 29 | View Replies]

To: Southack
Not my field, so let me ask:

If the printing presses at the US Mint run constantly and we issue lots of greenbacks, that would tend to be inflationary, right?

And if we sell $800B in US bonds to China, that is a debt and is deflationary, right?

31 posted on 03/08/2010 8:37:30 AM PST by ClearCase_guy (We're all heading toward red revolution - we just disagree on which type of Red we want.)
[ Post Reply | Private Reply | To 30 | View Replies]

To: ClearCase_guy

Yup.

Printing money is inflationary.
Going into debt is deflationary.


32 posted on 03/08/2010 8:40:36 AM PST by Southack (Media Bias means that Castro won't be punished for Cuban war crimes against Black Angolans in Africa)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Pining_4_TX

If you have income that you know will increase in nominal value along with inflation, get a big loan. The interest payments will not rise and the loan will get smaller in real value as inflation proceeds. If you income does not increase with inflation then no loan. My daughter has a mortgage that decreased as a share of her income because her income was outpacing inflation and did not pay it off when she could have because she felt she was “making money” with it. Then she lost her job and is reduced to part time work with a slowly declining number of hours and no chance of any sort of nominal pay raise. The mortgage is a huge burden now.


33 posted on 03/08/2010 1:36:53 PM PST by arthurus ("If you don't believe in shooting abortionists, don't shoot an abortionist." -Ann C.)
[ Post Reply | Private Reply | To 28 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Bloggers & Personal
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson