Free Republic

The federal government, under both parties, has printed trillions of dollars to fund its “stimulus” packages and other projects. This spending greatly increased during the COVID era. Basic economics teaches that the government printing press is not only the cause, but the very definition of inflation. Over the past 30 + months, prices of all consumer goods have risen dramatically. Real estate has achieved similar highs. Prices have appeared to stabilize only after action by the Federal Reserve system to restrict the money supply. The supply of money has been the key both to inflation and to its temporary taming....

Money supply growth fell again in April, plummeting further into negative territory after turning negative in November 2022 for the first time in twenty-eight years. April's drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years. Since April 2021, money supply growth has slowed quickly, and since November, we've been seeing the money supply repeatedly contract—year-over-year— for six months in a row. The last time the year-over-year (YOY) change in the money supply slipped into negative territory was in November 1994. At that time, negative growth continued for fifteen months, finally turning...

We all understand inflation when we go to the store and see items we need jump in price. What is less obvious is what the government tells us about inflation. Last week they reported good news: inflation dropped from 5.4% to 5.1%. These percentages were a ‘this month’ to ‘last month’ comparison. Sorry, that is like saying your fever is down from 102 to 101 degrees. You are still sick. You are not well. Nor is the economy. A better measure is a year-over-year trend analysis, which shows we are far from getting inflation under control. A better measure is...

If the Chinese yuan were to become the global reserve currency, it would, in essence, give the CCP the ability to cripple entire nations.In July 1944, 44 delegates from Allied countries came together during World War II in Bretton Wood, New Hampshire. The goal? Devise an international currency system to manage foreign exchange that would disadvantage no country and effectively facilitate post-war rebuilding and commerce. The outcome: The U.S. greenback would be the world’s reserve currency.It has been almost 80 years since, and all nations have been better off with a United States dollar-dominated world. World gross domestic product (GDP)...

The Federal Reserve on Wednesday enacted a quarter percentage point interest rate increase, expressing caution about the recent banking crisis and indicating that hikes are nearing an end. Along with its ninth hike since March 2022, the rate-setting Federal Open Market Committee noted that future increases are not assured and will depend largely on incoming data. “The Committee will closely monitor incoming information and assess the implications for monetary policy,” the FOMC’s post-meeting statement said. “The Committee anticipates that some additional policy firming may be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to...

Mortgage rates moved higher again last week, pushing buyers back to the sidelines just as the spring housing market is supposed to be heating up. Mortgage applications to purchase a home dropped 6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Volume was 44% lower than the same week one year ago, and is now sitting at a 28-year low. This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 6.71% from 6.62%, with points rising to 0.77 from 0.75 (including the...

WASHINGTON (AP) — The Federal Reserve will push rates higher than previously expected and keep them there for an extended period, Chair Jerome Powell said Wednesday, in remarks likely intended to underscore the Fed’s single-minded focus on combating stubborn inflation. Powell also signaled in a written speech to be delivered to the Brookings Institution that the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes. But Powell also stressed that the smaller hike shouldn’t be taken as a sign the Fed will let up on...

Americans are worried a recession is looming—and according to a top economist, they ought to be. Steve Hanke, a professor of applied economics at Johns Hopkins University, said this week that he believes the U.S. is heading for a “whopper” of a recession next year. In an interview with CNBC’s “Street Signs Asia” on Monday, Hanke argued that a major economic downturn had been made inevitable due to U.S. money supply soaring and stagnating. “We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it,” he...

If you are wondering when inflation will slow down, one of the first places to look is the overall money supply. There are several factors, but the easiest to understand are the M1 and M2 metrics. M1 is basically cash, and deposits. Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

As Joe Biden and Democrats talk about $6 trillion in new spending from DC alone, the consumer price index saw a 4.3 percent jump, the fastest increase since 2008. Reality eclipsed the already-high estimates as goods and fuel prices skyrocket.“Inflation accelerated at its fastest pace in more than 12 years for April as the U.S. economic recovery kicked into gear and energy prices jumped higher, the Labor Department reported Wednesday. The Consumer Price Index, which measures a basket of goods as well as energy and housing costs, rose 4.2% from a year ago, compared to the Dow Jones estimate for...

Toby Conner January 08, 2015 With commodities now moving down into their three year cycle low I’m hearing more and more talk about deflation. This is complete nonsense. Bernanke had it exactly right when he pointed out that any determined government could halt deflation at will with a printing press. As a matter of fact the only mildly deflationary event we’ve seen since 1932 was a brief period during 2008 and early 2009. Bernanke succeeded in stopping it in its tracks almost immediately with QE1. In order to experience deflation there must be debt defaults. That’s what happened in 2008....

Submitted by Simon Black of Sovereign Man blog,Over the past several decades, people around the world have become so brainwashed that few people really give much thought anymore to the safety of their currency.It’s not something people really understand... there’s apparently some Wizard of Oz type figure at the top of the hill pulling all the levers of the monetary system. And we just trust them to be good guys.This is partially true. Today’s financial system is dominated by central bankers who have been awarded nearly dictatorial control of global money supply.In allowing them to set interest rates, they...

Both Goldman Sachs and JP Morgan Chase have lowered Q2 Real GDP growth to 1%. Retail sales, although in Q3, were disappointing in today’s release. usretail071513 Tepid GDP growth and rising adjusted monetary base is not a great combination. moneyrelgdp As a consequence, M2 Money Velocity has plunged. m2velocbernake Of course, M2 Money Velocity is correlated with dwindling labor force participation. m2velpart The change in the M1 Money Multiplier is not so clear. m1multi And as I have discussed before, the rise in M1 Money Supply and the collapse of the Money Multiplier did not go unnoticed. m1multiexcess But both...

You were considered a hoarder and a slacker if you still resisted turning over your gold to the government. ... most of those who voted for FDR never expected him to confiscate private holdings of gold coins, bullion, and certificates. Roosevelt called the measure a temporary one (it wasn’t), and he followed it up by invalidating gold clauses in private contracts that obligated payment in gold dollars, which had the effect of devaluing the assets of bond and contract holders. ... By January 1934, Roosevelt increased the dollar price of gold from $20.67 to $35, thus devaluing the dollar by...

The latest development in the Libor-manipulation scandal is that the banks weren’t really fixing the price of the key interest rate in total secret — US regulators were aware of the sleazy activities at the time, and seemed to have done nothing. Which should surprise no one. I can’t tell you how much federal officials knew about the activities of Barclay’s, JPMorgan, Citigroup and the other big banks at the center of the maelstrom. In coming weeks, both Federal Reserve chief Ben Bernanke and Treasury Secretary Tim Geithner will inevitably discuss the mess when they appear before Congress. Bernanke testifies...

Confronted by multiple challenges in the wake of the global financial and economic crisis and having exhausted more traditional central bank levers which left interest rates at near zero, governments adopted a series of policies almost as a matter of course. Whether termed ‘credit easing’, ‘quantitative easing’ or ‘twisting’, these policies all have one thing in common – they increase the money supply... Further complicating the book keeping, some central banks, most significantly the U.S. Federal Reserve, are maintaining the policy of directly monetizing the federal debt. To be clear, debt monetization is not a result of the 2008-2009 crisis;...

Could Money Supply to Lead to Gold $10,000/oz? Mark O'Byrne Published 10/21/2011 Return To Article Gold is trading at USD 1,623.80, EUR 1,177.95, GBP 1,027.01, JPY 124,535.72, AUD 1587.39 and CNY 10,354 per ounce. Gold’s London AM fix this morning was USD 1,623.00, GBP 1,027.02 and EUR 1178.14 per ounce. Yesterday’s AM fix was USD 1,629.00, GBP 1,033.24 and EUR 1,180.17 per ounce. Gold prices are mixed today as markets remain on edge due to increasing divisions amongst European leaders on how to solve the intractable euro-zone debt crisis. There continues to be very strong demand for physical bullion globally...

Ron Paul's recent idea on how to ease the national debt is hardly original but none the less worthy of consideration. He has proposed what leftist critics of the status quo monetary system have been proposing for decades: that money printing should be used to fund the government. To give Ron due credit, he is not proposing exactly that. More precisely, he is proposing that the Fed should tear up a bundle of its Treasury securities, which would lower our overall debt total bringing us below the current debt ceiling. Still, the mechanics are identical, if not in reverse order....

Federal Reserve chairman Ben Bernanke couldn't deny the obvious in his speech Tuesday in Atlanta. The economy is bad, with Obama’s “recovery” is setting records for being anemic and the unemployment stuck above 9 percent. Almost 5 million Americans have completely given up looking for work and left the labor force since the "recovery" that started in June 2009. GDP growth the seven quarters into the Obama recovery has averaged an annual rate of only 2.8 percent, a fraction of the 4.6 percent average growth during recoveries since 1970. And this recovery would have been even worse if the Federal...