FRB_MoneySuppy_1959-2009_090609 - The Future With Some Disgusting Clarity

By
Services for Real Estate Pros with South West Florida Real Estate Investment Association

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".

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).


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.

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)...

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banking
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Rainer
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Jeffrey Tumbarello

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