What is this a graph of?
Global warming? Runaway climate change? No. It’s the …
Adjusted Monetary Base
The Volokh Conspiracy writes:
Perhaps less-known but more frightening is the incredible growth in the money supply over the past year or so. I first found out about this a few weeks ago in this post by Peter Robinson which links to this extraordinary graph from the St. Louis Fed. Note the 2009 figures (and below the chart you can click on it to see different benchmark comparisons).
Why has this incredible boost in the money supply had no impact? Presumably because the “velocity” of money has remained low–people and banks are hoarding money, rather than spending, borrowing, and lending it. Assuming velocity rises again, however, we may be looking at an inflationary spiral like we’ve never seen before in this country.
Peter says it well, “We’ve Never Been Here Before.”
That was the idea, wasn’t it?