Tuesday, December 30. 2008 Posted by Karl Denninger at 08:30 Uh Oh..... Monetary Flat Spin That has gone "just below" 1.0. What is this? I could go through the derivation of how money supply works in a fractional reserve monetary system (any), but won't, because most readers would have their eyes glaze over. The important part of this graph is what it denotes. Bernanke has lost control of "N" (or velocity), which is the actual knob that he is trying to diddle when borrowing rates are changed (and in fact its the market that sets that, despite his protests.) In...