The Message of the Adjusted Monetary Base
March 6, 2009
First, here is the latest chart of the adjusted monetary base. Look at the increase since late September 2008. That is when I date the transition from Keynesian capitalism to outright fascism. If you think I am exaggerating, read my explanation here:
The rate of increase in the AMB is 228% per annum. That is with the recent reversal.
Second, the Federal Reserve's Open Market Committee has pulled back recently. I said it would it would. If it hadn't, the rate of increase would have been 300%.
The FED has not returned to where it was last September. It dares not do this now. If it did, the recession would turn into a depression. Most of the largest U.S. banks would fail. The unemployment rate would go to 20% or more within a few months. Housing prices would fall by another 20%, and probably 40%.
Sir John Templeton, the millionaire investor, said in 2003 that U.S. housing prices would fall by 90%. I wrote about this in Gary North's Reality Check.
How serious is this increase in the monetary base? This four-minute video gives you some idea of what has happened. View it, and then read my comments below the video box.
The average American knows nothing of this. All he knows is that the economy is slowing down. He worries about this. What has happened since September is far more fundamental than a recession. It has changed the world. Our world today is not what it was in the first week of September.
Emotionally, this is difficult to deal with. Intellectually, you had better start dealing with it.