'Fed' planning to increase money supply 1,500%

[Col. Flagg]

http://www.marketskeptics.com/2009/03/f ... in-us.html

At least 70 percent of all US currency is held outside the country, and this means the US monetary base is considerably smaller than the fed’s overall balance sheet. Take, for example, the true US domestic money supply at the beginning of September 2008, before the fed started its quantitative easing. From the Federal Reserve’s website, we know that currency in circulation was 833 Billion. This translates as 583 Billion dollars circulating abroad (70 percent), and 250 Billion dollars circulating domestically (30 percent). Since the bank reserve balances held with Federal Reserve Banks were 12 billion, that gives us a 262 Billion domestic monetary base as of September 2008. Now compare that to the projected US domestic monetary base for September 2009 which is 3,818 billion (4,500 billion – 583 billion (dollars circulating abroad) – 99 billion (other fed liabilities not part of the money supply)). The fed’s planned balance sheet expansion results in a 15-fold increase in the base money supply.

262 Billion = US monetary base as of September 2008 (minus dollars held abroad)
3,818 Billion = projected US monetary base in September 2009 (minus dollars held abroad)

3,818 Billion / 262 Billion = 15-Fold Increase in US monetary base

This is a staggering devaluation of the US currency! It means that for every dollar in America in September 2008, the fed is going to create fourteen more of them!

I know a few forum members are predicting a deflationary depression. I'd like to know how, especially under this scenario If my math is correct, printing up 14 more bucks for each one is a de-valuation of one dollar by 93%. In other words, the dollar you had before is now suddenly worth 7 cents compared to the 100 cents before. 100/7 = 14. Thus, that loaf of bread that costs $1.25 is now going to cost $17.50.

[ldsff]

Fed Said Monday It Has Expanded Credit Lines To Foreign Central Banks

WASHINGTON (AP) - The Federal Reserve said Monday it has expanded credit lines with the central banks of Japan, Switzerland, the United Kingdom and European Union that will provide foreign currency to U.S. banks - if needed.

Under currency swap arrangements, which were common last fall when the credit crisis intensified, the Fed provides dollars in exchange for reserves of the other nations' currencies.

"Should the need arise, euro, yen, sterling and Swiss francs would be provided to the Federal Reserve via these additional swap agreements with the relevant central banks," according to the Fed release. "Central banks continue to work together and are taking steps as appropriate to foster stability in global financial markets."

The Fed said the expanded credit lines, authorized through Oct. 30, are worth the equivalent of up to $45 billion with the Bank of England, $108 billion with the European Central Bank, $99 billion with the Bank of Japan and $35 billion with the Swiss National Bank

Separately, the Fed said it will auction off $150 billion in short-term loans to nonbanks and other financial institutions under a program that began last year. The auctions provide loans to those institutions on similar terms that the central bank provides to banks, and are intended to stabilize the U.S. financial system.

[Spence]

If those numbers are true, they would have to be just paper currency. Most of our system today works on electronic currency. As well those are some illogical numbers. It is only a 5 fold increase and doesn't matter as much because there is trillions of electronic currency flowing around.

Beware of the people who will sway you with deceptive messages like that one Col. Will we see hyper-inflation, I personally hope not. But I am going to take my advice from sources that are honest and not deceptive. There are wolfs all around us that would love to see everything collapse for various reason. All of them tend to point to personal gain. Wolfs proliferate the freedom movement for various reasons and I always cautious who I accept advice from because every single one of them have angles, and those angles are often sinister ones.

I just don't see how hyper-inflation would play into the hands of the bankers who run the Fed. Everyone aware would be able to pay off their debts like magic. Political unrest would ensue, and you would have an armed and angry public. They would be ousted and it would be game over. Satan isn't that dumb.