Why Some Think Extreme Inflation is Possible for USA, Monetary Base Exploding

Why Some Think Extreme Inflation is Possible for USA, Monetary Base Exploding

The Chart you see is from the Federal Reserve itself.   It shows that when Ronald Reagan took office in 1981 the Monetary Base was $194 Billion.  28 years later it was $875 Billion (September 2008).  When Barack Obama took office it was $1.554 Trillion.

Today it is $4.002 Trillion.  Even in inflation adjusted dollars, it has exploded as never before since Obama was elected in 2008.   The explosion started under Bush, just about election day 2008.

What is the Monetary Base?  The Fed says,  “The Adjusted Monetary Base is the sum of currency (including coin) in circulation outside Federal Reserve Banks and the U.S. Treasury, plus deposits held by depository institutions at Federal Reserve Banks. These data are adjusted for the effects of changes in statutory reserve requirements on the quantity of base money held by depositories.”

The chart and definition is here at this Federal Reserve website: http://research.stlouisfed.org/fred2/series/BASE/

The Federal Reserve is NOT  the USA government, it is a private hybrid bank that was given a monopoly by the US government in 1913 to print money.  If you look at a dollar bill, it says “Federal Reserve Note” on it.   Today most money is electronic money.    The massive increase in money shown on the above chart  has cost the Federal Reserve nothing.  They in effect counterfeit the money, then lend it to people and the USA government.  When they get the money back,  it would seem to be infinitely profitable for them.   The problem is when the Monetary Base is greatly increased, as the chart above shows, the natural effect is inflation, extreme inflation.


What caused the Massive German inflation of the 1920s which led to a loaf of bread going from 1 Mark to 1,000,000 Marks?

The Monetary Base explosion before the hyper inflation is the culprit in most studies.  Below is a chart of how increasing the Monetary Base related to inflation in Germany.


CHART: GERMAN MONETARY BASE EXPLOSION CREATED HYPER-INFLATION  http://goldsilverworlds.com/gold-silver-insights/gold-stable-monetary-base-lead-to-economic-prosperity-peace-germany/

The Monetary Base increased first in Germany (DOTTED LINE), for years, then inflation mirrored it almost perfectly.


Here again is the current American Chart; compare the two. This is why some are extremely concerned about hyper-inflation coming to America.


Currently we are seeing the beginning of the same effect in the USA economy. Inflation in the price of gas, food, rent, etc. has been going up relatively rapidly in the last year, but the official inflation index method is changed by the government to hide it.  The simple fact is gasoline, beef, pork, electricity, etc. are at all time highs now.  price of electricity hits new record

The vast majority of the news media companies in America talk about the “Fed” constantly.  In fact CNBC probably talks about the Fed more than any other subject, but never says what the Fed is.

If you want to know more about what the Federal Reserve is, here is a video that explains it, by acknowledged expert G. Edward Griffin.  You will know more about the Federal Reserve and our money system, than likely 95% of Americans, after viewing it:

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