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*****Fed planning 15-Fold Increase in US monetary base*****
Market Skeptics ^ | March 20, 2009 | Eric deCarbonnei

Posted on 03/20/2009 10:11:56 AM PDT by givemELL

"The fed is planning moves that would more than double its balance-sheet assets by September to $4.5 trillion from $1.9 trillion. Whether expressing approval or concern over the fed’s move, most commentators fail to understand the real magnitude of the projected expansion of the US monetary base because they don’t take into account the amount of dollars circulating abroad......................The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply.

262 Billion = US monetary base as of September 2008 (minus dollars held abroad) 3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)

3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base

This is a staggering devaluation of the US currency! That means for every dollar that existed in America in September 2008, the fed is going to created fourteen more of them! Below is a rough sketch of what this Increase in US monetary base would look like:

>GRAPH<

This 15-Fold Increase will be impossible to reverse

Next September, when the fed realizes it has gone too far and tries to reverse its balance sheet expansion, it will be unable to do so. The realities which will hinder the fed’s control of the money supply are:"

(Excerpt) Read more at marketskeptics.com ...


TOPICS: Business/Economy; Front Page News
KEYWORDS: 15fold; base; clowardpiven; increase; manufacturedcrisis; monetary; stimulusepicfail; ukraine; weimar; zimbabwe
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A full detailed discussion clearly defines the coming year and the deleterious forces at play. The Feds moves are in a closed box in which it and the US cannot escape from. Our economy will surely collapse if devaluation of assets continues, and exposure to the anticipated inflation will require that the assets be eventually liquidated at disastrous actual value prices. All these things are discussed in detail. A more than entertaining read.
1 posted on 03/20/2009 10:11:57 AM PDT by givemELL
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To: givemELL

Maybe I’m going too far here, but I can’t help thinking of Weimar, Zimbabwe, the Ukraine and Ayers’ “final solution”.


2 posted on 03/20/2009 10:17:37 AM PDT by Califreak (111th Congress: Destroying America With Reckless Abandon)
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To: givemELL

Your dollar will now be worth one penny. A loaf of bread will cost $500.
It’s post-WW1 Germany, folks.


3 posted on 03/20/2009 10:22:17 AM PDT by beethovenfan (If Islam is the solution, the "problem" must be freedom.)
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To: givemELL

...gulp....


4 posted on 03/20/2009 10:25:57 AM PDT by PogySailor (We're so screwed.....welcome to the American Oligarchy)
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To: givemELL

Interesting analysis. How good have his articles and predictions been in the past?


5 posted on 03/20/2009 10:26:39 AM PDT by gieriscm (07 FFL / 02 SOT - www.extremefirepower.com)
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To: beethovenfan
Your dollar will now be worth one penny. A loaf of bread will cost $500.

Glenn Beck has been urging people to buy what they need ASAP before their money becomes worthless. Food storage set aside for an "emergency" may well be an essential element of survival.

6 posted on 03/20/2009 10:27:18 AM PDT by Myrddin
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To: givemELL
Here's a comment posted by one of the readers of that article:

"Photoguy said...

Eric,

"Excellent, lucid, thought-provoking post. I agree on the "ego" post regarding Denninger; if he's going all cash, he'll be in the food lines of 2012."

"There is no doubt, NO DOUBT, in my mind that within the next three years, Au & possibly Ag will be confiscated. Other than canned goods, hard liquor, and other obvious storable items of value, what else could be transition our wealth into that could be easily stored and that would preserve our wealth during a period of hyperinflation? Other than Au & Ag? Diamonds are too hard to accurately grade, so I wouldn't want them. Land & CRE is taxed each year, so I don't want that. What?"

"There has to be something, other than Au & Ag. Perhaps I'm overthinking this, but I see what's coming and I'm doing my best to prepare."

7 posted on 03/20/2009 10:28:25 AM PDT by blam
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To: Myrddin

How does one decide whether home ownership will be a good idea? On the one hand, the monthly cost (mortgage) is fixed (assuming a fixed rate mortgage). On the other, the cost of repairs and maintenance is bound to skyrocket.


8 posted on 03/20/2009 10:31:09 AM PDT by freespirited (The trouble with socialism is that you eventually run out of other people's money. -- M. Thatcher)
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To: givemELL

9 posted on 03/20/2009 10:31:15 AM PDT by razorback-bert (Will trade sex for ammo)
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To: Myrddin
"Glenn Beck has been urging people to buy what they need ASAP before their money becomes worthless. Food storage set aside for an "emergency" may well be an essential element of survival."

You will want to keep your food hoarding habits to yourself too.

10 posted on 03/20/2009 10:31:51 AM PDT by blam
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To: freespirited
If your mortgage is paid off, you simply need to set aside money to handle the repairs and maintenance as needed. I do most of my own repairs. Home Depot and Lowe's provide most of what I need. Maintenance and repair is an inescapable expense. You're not going to escape it by renting either. A prudent landlord includes enough extra in the rent to set aside a fund for keeping the property maintained. Likewise, renting is no shelter from property taxes. Those get included in the rent too. Renters who vote for property tax increases with the mistaken assumption that they won't be hit are living in la-la land.
11 posted on 03/20/2009 10:40:05 AM PDT by Myrddin
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To: razorback-bert; Black Agnes
We can all be billionaires! Yippee!


12 posted on 03/20/2009 10:42:49 AM PDT by Travis McGee (www.EnemiesForeignAndDomestic.com)
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To: givemELL

Reference bump ... why are we in this hand basket and where are we going? :-(


13 posted on 03/20/2009 10:45:14 AM PDT by Tunehead54 (Nothing funny here ;-)
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To: blam
You will want to keep your food hoarding habits to yourself too.

Yup. Firearms details should likewise be kept quiet. You don't want to paint a target on yourself. I've been tempted to purchase a gasoline powered generator for emergency purposes at the house. I've resisted because a running generator makes noise and attracts attention. At a time when others have no electricity, the noise tells everyone else that you do have electricity. You probably have food too.

Having some backup water is critical. My city provides water from the aquifer below the city. It is pumped with electric pumps. There are a few storage tanks, but they won't last long in a prolonged power outage. Gas stations don't work without electricity either. A prolonged outage would find folks on bicycles to fetch water from the river. It's at least 5 miles to the nearest surface water in my area. That's a damn long way on foot or peddling a bicycle.

14 posted on 03/20/2009 10:46:22 AM PDT by Myrddin
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To: freespirited
How does one decide whether home ownership will be a good idea? On the one hand, the monthly cost (mortgage) is fixed (assuming a fixed rate mortgage). On the other, the cost of repairs and maintenance is bound to skyrocket.

Speaking as both a homeowner and a landlord... if you have decent credit and a down payment, a mortgage of 5-6% should look pretty good considering the inflation and subsequent rise in interest rates that's expected to hit us over the next few years.

As a renter, you're paying your landlord's mortgage(s), property taxes, insurance, and maintenance costs anyway. If I had extra money laying around, I'd buy more rental property.

15 posted on 03/20/2009 10:48:45 AM PDT by gieriscm (07 FFL / 02 SOT - www.extremefirepower.com)
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To: givemELL
I'm not a finance expert but I can see that there's a lot of bad math in this article.

The underlying news is that the Fed is going to increase the amount of treasury securities it holds from 1.9 trillion to 4.5 trillion.

The article subtracts the currency currently circulating abroad from the new amount of treasuries held by the Fed to get a figure for the new "US domestic monetary base" of 3818 billion.

It then defines the old monetary base as the currency circulating in the US = 250 billion.

But shouldn't the old monetary base be computed the same as the new? In other words it should be 1.9 trillion - 583 billion = 1.317 trillion.

This would mean the the US monetary base is increasing by a factor of about 3 rather than 15.

Also the article assumes that all the new money created will circulate in the US. Taking this into account would mean that the US monetary base is increasing by a factor of less than 3.

16 posted on 03/20/2009 10:49:46 AM PDT by wideminded
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To: givemELL

Welcome to the Big Zimbabwe.


17 posted on 03/20/2009 10:50:42 AM PDT by Theophilus (The people who were going to buy your home got aborted 30 years ago.)
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To: givemELL

the other factor nobody ever comments about, is that an overseas dollar is about 50% more valuable than a domestic dollar...because it escapes the current confiscatory taxation we’re drowning under....


18 posted on 03/20/2009 10:51:25 AM PDT by mo
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To: blam

As I pointed out yesterday, the flag is up... Hard decisions to make here. Will be at the gulch next week, seems we will be on a buying spree when we get there...


19 posted on 03/20/2009 10:51:41 AM PDT by JDoutrider
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To: Myrddin
I don't think the madness will lead to lack of power and water.

It would lead to lack of food only because you would not have enough cash to keep up with inflation.

The real problem is how to keep something that is trade-able for your needs.

Water and electricity would only be unavailable if you could not pay for it. You will be in big trouble before you reach that stage.

20 posted on 03/20/2009 10:52:33 AM PDT by old curmudgeon
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To: givemELL

H Y P E R I N F L A T I O N COMING..........

The ONLY safe investments will be land, property, and HOLDING precious metals like Silver and Platinum.
(Gold is WAY oversold, imho)
Physical Holding, not funds...

On the bright side, passbook savings yields will go up, but it won’t keep pace with Inflation.


21 posted on 03/20/2009 10:54:16 AM PDT by tcrlaf ("Hope" is the most Evil of all Evils"-Neitzsche)
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To: givemELL
Can anyone explain to me how this won't cause double digit inflation / hyper-inflation?
22 posted on 03/20/2009 10:54:19 AM PDT by mysterio
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To: Califreak

This is on purpose. The zero plans to make the dollar worthless so he can “pay off the national debt” with worthless dollars. Never mind that it will take a wheelbarrow full of money to buy a loaf of bread.


23 posted on 03/20/2009 10:55:32 AM PDT by Blood of Tyrants (Socialism is the belief that most people are better off if everyone was equally poor and miserable.)
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To: All

There is one place that makes the paper for the currency. Is there a way to check their output and see if it’s either rising or planning a significant increase?


24 posted on 03/20/2009 10:57:22 AM PDT by newnhdad (The longest of journeys begins with one step.)
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To: givemELL

mark


25 posted on 03/20/2009 10:57:59 AM PDT by Former Proud Canadian (How do I change my screen name now that we have the most conservative government in the world?)
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To: old curmudgeon
HR875 is aimed a criminalizing your ability to be self sufficient in producing your own food. The Marxists are pressing us towards Zimbabwe. Currency devaluation and crushing regulations to make life unbearable.
26 posted on 03/20/2009 10:57:59 AM PDT by Myrddin
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To: Blood of Tyrants

That is exactly why I’ve been thinking about the Soviet Famine so much lately.

I have never been so afraid of the government as I am now.


27 posted on 03/20/2009 10:58:22 AM PDT by Califreak (111th Congress: Destroying America With Reckless Abandon)
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To: wideminded
This would mean the the US monetary base is increasing by a factor of about 3 rather than 15

Whew, I was worried there for a minute.

28 posted on 03/20/2009 11:01:12 AM PDT by razorback-bert (Will trade sex for ammo)
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To: Tunehead54
Why are we in this hand basket and where are we going?

Because we haven't been paying attention. The elitists in our government have been playing shell games. AIG is a smokescreen. Just a ruse so that no one would notice what they were doing Wednesday afternoon. The government is making things happen so quickly, WE don't have time to digest the news until days after the fact. Guys, Think silver and gold. A silver coin waved in front of a store clerk can get you a loaf of bread quicker than paper, and it is so much cheaper than gold.

29 posted on 03/20/2009 11:02:39 AM PDT by lucky american (Glenn Beck Rocks!!!)
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To: mysterio

That’s not the question, really.

They KNOW it will cause hyperinflation,

and THEY DON’T CARE.

They look forward to the day when whitey has a tire burning around his neck.


30 posted on 03/20/2009 11:04:51 AM PDT by MrB (irreconcilable: One of two or more conflicting ideas or beliefs that cannot be brought into harmony.)
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To: givemELL
Everybody needs to see THIS VIDEO
31 posted on 03/20/2009 11:06:58 AM PDT by mvruckman
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To: razorback-bert

And when anyone says anything-”fold”, most likely they are using it wrong.

There’s a big difference between three times and three fold.

Three times, of course, is 3X. Three fold is 8X (2 ^ 3).

Think of it as “folding” a piece of paper. Fold it once, it has two layers, fold it again, 4, again, 8, etc.


32 posted on 03/20/2009 11:07:09 AM PDT by MrB (irreconcilable: One of two or more conflicting ideas or beliefs that cannot be brought into harmony.)
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To: Myrddin

We just ordered heirloom seeds today and paid extra to go to the top of the incoming orders.
Best money we’ve ever spent.


33 posted on 03/20/2009 11:11:20 AM PDT by AirForceMom (Locked and loaded, and sharpening my pitchfork.)
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To: givemELL
4.5 trillion quatloos on the US economy!


34 posted on 03/20/2009 11:12:03 AM PDT by xp38
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To: MrB
Great, back to worrying about being broke, poor and hungry again.
35 posted on 03/20/2009 11:12:59 AM PDT by razorback-bert (Will trade sex for ammo)
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To: givemELL
This article needs to get their facts correct.

They mention that 70% of US currency is circulating abroad - which is true to a point. That number is "PHYSICAL" currency, a.k.a. Federal Reserve Notes.

The article then goes on to state how 70% of the current money in circulation (FRN's AND computer entries) is overseas. This is completely incorrect.

FRN's make up about 3% of the currency in circulation. Of that 3%, 70% of those FRN's are held overseas.

36 posted on 03/20/2009 11:16:21 AM PDT by politicket (1 1/2 million attended Obama's coronation - only 14 missed work!)
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To: AirForceMom
Hope you can plant them in an Hybrid Free area. The do not do well in cross pollination with Hybrid species. You will not be able to reuse your seeds.
37 posted on 03/20/2009 11:19:15 AM PDT by lucky american (Glenn Beck Rocks!!!)
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To: Myrddin
I get a kick out of a particular young girl I work with, nice kid but misguided, who thinks that i am just predicting things are going to get bad because i didn't vote for BHO.

I present all the things he is doing or proposing and her reply is, “I just have faith that none of that will happen.”

See what we are up against

38 posted on 03/20/2009 11:22:29 AM PDT by lakertaker (Libertarian Party since 1998)
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To: mvruckman

Link doesn’t work....

CA....


39 posted on 03/20/2009 11:24:40 AM PDT by Chances Are (Whew! It seems I've at last found that silly grin!)
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To: givemELL

Ping for later


40 posted on 03/20/2009 11:25:30 AM PDT by Sequoyah101 (Get the bats and light the hay)
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To: lakertaker
...and when it does come to pass, you can bet her tack then will be along the lines of, "If you evil, evil Republicans hadn't indulged in these self-fulfilling prophecies, and just had faith in The Obama, like me, then none - NONE - of this would have happened!!

"I'm reporting you!!!!"

CA....

41 posted on 03/20/2009 11:30:56 AM PDT by Chances Are (Whew! It seems I've at last found that silly grin!)
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To: givemELL

http://en.wikipedia.org/wiki/Quantitative_easing


42 posted on 03/20/2009 11:32:37 AM PDT by LifeComesFirst (Until the unborn are free, nobody is free)
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To: lakertaker
Brainwashed air head. My condolences on sharing the office with people that clueless.
43 posted on 03/20/2009 11:36:33 AM PDT by Myrddin
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To: givemELL

That’s a pretty heavy Link, Whew!


44 posted on 03/20/2009 11:40:12 AM PDT by Pagey (B. Hussein Obama has no experience running anything, except his pedestrian mouth.)
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To: freespirited

How does one decide whether home ownership will be a good idea? On the one hand, the monthly cost (mortgage) is fixed (assuming a fixed rate mortgage). On the other, the cost of repairs and maintenance is bound to skyrocket.


Owning may be a minor hedge against inflation. the real benefit is OWING. A fixed rate loan is probably your greatest asset in inflationary times, because you can pay off that house is significantly inflated dollars.

As far as repairs, most of that is labor, and your own wages (or investment income) will inflate along with the plumber’s wages.


45 posted on 03/20/2009 11:42:55 AM PDT by Atlas Sneezed (Obamanomics="Trickle-up Poverty")
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To: lucky american

Our youngest girl and her husband live out in the boonies. That’s where we’d plant. The seed pack we have coming plants a full acre.


46 posted on 03/20/2009 11:44:15 AM PDT by AirForceMom (Locked and loaded, and sharpening my pitchfork.)
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To: MrB

Oddly, I have never heard that definition before. is this your inventive interpretation, or do you have some other evidence to support it?


47 posted on 03/20/2009 11:46:31 AM PDT by Atlas Sneezed (Obamanomics="Trickle-up Poverty")
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To: MrB
Main Entry: -fold

Function: suffix

Etymology: Middle English, from Old English -feald; akin to Old High German -falt -fold, Latin -plex, -plus, Old English fealdan

1 : multiplied by (a specified number) : times —in adjectives and adverbs

2 : having (so many) parts

http://www.merriam-webster.com/dictionary/-fold

48 posted on 03/20/2009 11:48:34 AM PDT by Atlas Sneezed (Obamanomics="Trickle-up Poverty")
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To: Beelzebubba

It was a biblical interpretation I read...
“10 fold” means 1024 times

However, I believe it has been “vernaculared” into meaning 10X.


49 posted on 03/20/2009 11:51:10 AM PDT by MrB (irreconcilable: One of two or more conflicting ideas or beliefs that cannot be brought into harmony.)
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To: Myrddin

Oh I hate picking on her. She is a nice kid but like a lot of other kids that age they get their news from “The Daily Show.”


50 posted on 03/20/2009 11:51:17 AM PDT by lakertaker (Libertarian Party since 1998)
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