FRB_MoneySuppy_1959-2009_090609 - The Future With Some Disgusting Clarity

[Jeff Tumbarello]

So, I was doin' what I do when sleep doesn't happen... I shoulda
knocked myself out instead.

This fresh-off-the presses FRB Report can be found at:

http://www.federalreserve.gov/releases/h3/hist/h3hist1.txt

Double the REAL CASH money supply, fix the Banks, break the rest of the "little people" world by default. The Banks will multiply that cash by at least 10 times, likely borrowed @ 0% and "loaned" to the Treasury through T-Bills @ 2.5+% in 12-120 month laddered terms. The good news in that data? FRB doesn't dare raise the base interest rates while
these run their course, since it would squeeze the Banks all over again.

Note the BANKS still have the majority of the cash injections, but have dropped about $110B of it in TWO MONTHS with no positive results. Don't worry about the Banks, though - they'll be fine no matter what they do next.

Note also only .5T is listed as "Borrowed" - the rest of the gift is
PREFERRED STOCK, so it doesn't have to be listed as debt, just a "liability".

By the way - search for Chrysler's $11B debt FORGIVEN in the bankruptcy proceedings last week. It was charged to what is now known as "The Old Chrysler", so Fiat and the Unions get to skip town with our money. TheOld Chrysler has just enough money to pay the Attorneys and the Working Group (probably GS) to get it through the bankruptcy (sure it does -watch & see that grow)

Gummint Motors will be next, but it's at least $30B gone to dust (withpromises of unlimited support to "get on their feet").


the money supply has went from 1.2 trillion to 1.6 trillion under Mr. Obama's watch. And since it is being handed to the banks, give it a multiplier of 10:1

There are three things that I can see happening:

1. Simple inflation
2. dollar collapse within the next 90 days and spiral into hyper inflation
3. Both of the choices may and probably will occur. Devaluation has already occurred in the now-factual doubling of the base currency, though its "formal" effect is staved off by fear in gov'ts outside our borders as well as inside our borders.

Can this trend go on for long (years) without effect? No

Do those who did it know the effect? Yes - the caving to the GS-built Treasury Chief(s) was a serious mistake, though "The Plan" was not the worst of the possible plans available. That "The Plan" was subterfuge is now historically factual - the REAL plan is now obvious and should be criminally prosecuted for its fraudulent and damaging realities. That won't happen.

Is/was there another way? Yes - GENTLY putting cash in the hands of the consumer and its employers would lessen the effect of a fiscal reset which HAD to happen once the Gov't forced Lenders to lend to those who simply could never repay. The Lenders took full advantage of the requirements, blowing a reduction in profit into a debacle of lost capital never before seen on earth. Pre-WWII Germany came close, but theirs was immediately inflationary without controls in place to stave off our outcome. By the way, Pre-WWII Germany was the BEST example of Keynesian Theory put in motion - it failed beyond belief in record time, bringing Germany to no other choice but expansive MILITARY budgets with the attendant military action to support the whole notion of fiscal expansion by Government spending (Keynes, pure and simple).

Was Keynes an idiot? No, just another government employee with a vision for tyranny and an acceptance level among socialist which was almost unanimous. He was additionally a Nazi supporter, supported through early adulthood by Father and Friends, languishing in government employment (hired/protected/revered by the LIBERAL PARTY) for the balance of his life. He broke the Bank of England, then his own Nation with his policies, but was revered as was Greenspan as he built a legacy as a hero whose deeds caused far more destruction than his legacy will ever reflect. The fiscal history of his own Nation is clear for any who'll read it, history's authors blame it ALL on conservative (Friedman-like) capitalist fiscal policies to this day.

Was Friedman an idiot? No, just another free-thought math genius whose methodology was attempted in parts, never taken in its entirety or it would work as well in gov't financial matters as it does in personal financial matters (Keyne's doesn't work in either when applied in toto). Friedman supported both Keynesian theory AND the FDR economic models until he lived long enough to see what horrid effects both have on reality's "test" on both theories. His "blend" of all models was a better approach to fiscal disaster and general control prior to disaster, but his approach was ALWAYS blended heavily toward Keynes when even tried by Governments - they lose too much CONTROL with free-market capitalists paying non-government employees for productive labor, you know.

Which theory did Bernanke favor prior to his nomination? Friedman (He taught it for decades, proving its merits over and over again both in theory AND in practice against real-time events through the decades.)

Which theory is Bernanke/Geitner using today? Keynes, almost exclusively, but with a twist never seen outside communist countries; CREATE MONEY ONLY TO SAVE AND SUPPORT THE UPPER CLASS and ONLY AT THE EXPENSE OF THE LOWER CLASSES.. This is a SUPREME fraud for which we "little people" will pay for decades, not just years.

Essentially, we've now doubled base money (cash or its real equivalent), which will be multiplied/monetized at today's favored multiple - something like 30+ times. The effect on M2 and the now-unreported M3 will be pure disaster at some date in the future, but they'll stave off the damage as long as THEY NEED US AS CUSTOMERS - not a day beyond.

South America, India and Africa are being groomed for expansion at high speed. This will be a race to the finish line, we're in the lead as "economic serfs" by at least a neck, but losing ground fast against external nations chock-full of new customers for non-US goods.

USEFUL Hard assets and CASH - as always, these last longer than other "investments" in a true Depression. Gold is NOT a useful hard asset unless the bearer can escape to some place where it can be converted to useful currency. FDR knew that, his rendering of gold as ILLEGAL for personal ownership put the kibosh on all the "Hoarders" in June, 1933. History's clear, but few will even take the time to read it, fewer yet would believe that could happen again. NONE of those can say why they think it wouldn't happen, as they all have plans to flee with bags of gold, though they only hold CERTIFICATES which say they "own" some. That'll be darkly humorous if "The Real Crash" comes as it does - "Without Warning", though the bells ring for years prior to its arrival.

By the way, Keynes went BUST in 1929 - The Crash he didn't see coming hit him hard, fast and deeply. He recovered, but he was, after all, a GOVERNMENT FISCAL EMPLOYEE at the time.

Other'n that, I don't know much about it.. I know this: This cannot continue for as long as most believe it might. The lag from action to effect in Government-driven fiscal policy is 9-18 months, can be "deferred" to 24 months at the most.

We're ticking past 10 today (from Oct 2008 - the first BLAST of capital into the vaults of Banks and NOT lent for productive economic support)...

We'll see, but we'll also survive if we keep an eye on expenses, make what can be made of a day's labor and save what can be saved from its earnings. If we don't survive, we'll at least land on a lot of bodies whose heads weren't screwed on tightly when they were moving around and free to LEARN or continue in ignorance.

By the way, Friedman was a socialist as well - he worked for ONLY the government until he found a comfortable position with the educational "system". He converted his beliefs and brought gov't into sound policy until "The Great Society" (LBJ) took his ideas and threw them into the trash in order to STEAL/SPEND/BUY VOTES through Keynesian economic policies. We've been pretty much toasted as these two approaches waxed/waned through our wallets ever since.

Wiki has a decent bio on both Friedman and Keynes, but even those are heavily skewed toward Keynes. No facts will ever change the altered history, it's just how it goes for those who only read what the alterers write.

"In his autobiography, he comments on "how thoroughly Keynesian I was then". As Friedman grew older he reversed himself; in 2006 he observed, "You know, it's a mystery as to why people think Roosevelt's policies pulled us out of the Depression. The problem was that you had unemployed machines and unemployed people. How do you get them together by forming industrial cartels and keeping prices and wages up?"

One FACT remains clear: Mr. Bernanke owes Mr. Friedman ANOTHER apology. He promised in his last apology - "we'll never do it again" - just a few short years ago. He's a government employee now, you know.