If the economy is hunky dory, then why is the money supply going parabolic?
The adjusted monetary base is all currency either in circulation with the public or held in bank reserve accounts at the Fed. This chart reflects all of the money the Fed has printed since QE started. As we know, most of this money has ended up in the Fed’s “Excess Reserve” accounts of the Too Big Too Fail banks. This is more than just “noise,” to borrow Yellen’s term. There is a very specific reason for this and my co-producer and I are working on a multi-part video series explaining what we are pretty certain is going on and why most of the money printed up by the Fed – and most of the money the Fed continues to print in a parabolic fashion (see the graph above) – remains on the big bank balance sheets.
Hint: there is a massive derivatives melt-down brewing, the likes of which will probably trigger the collapse of the dollar.
Other than that minor occurrence, the graph above raised some interesting questions that no one in the media or Congress seems capable of asking Fed Chairman Yellen. So I will ask them. Please feel free to email them to the Fed.
If the economy is recovering, why is the money supply still expanding at a parabolic rate? If the recent numbers which show accelerating inflation are just “noise” – in your words, Janet – how come my monthly grocery and gasoline and housing expenditures are roughly 25% higher than they were this time last year? Janet, when is the last time you spent money at the grocery store or at a restaurant? When are you going to drain the excess reserves of the big banks, which are just sitting there collecting more interest than a 30-day T-Bill?
For everyone else reading this, why are you still holding money in bond mutual funds and money market funds? You are watching a speeding freight train with no brakes come straight at your car stuck on the tracks and yet, you seem incapable of getting out of your car and running to safety?
Get your money out of bond and money market funds and buy every dip in gold, silver and mining stocks. For some great junior mining stock ideas, see this: Junior Mining Stock Research Reports.