Monday, January 26, 2009

Indications and Warnings

Remember, in economics - the reaction is delayed. That is why there are economic crisis. Greed and fear work on a different time scale than economics. What you are looking at is the nation's "adjusted monetary base," a measure of the money supply, from the end of the First World War to the present from the Federal Reserve Bank of St. Louis.

This will come back to haunt us. Ever wanted to live in Argentina? Well, you may very well get their economy. Remember, the core of this started when the Diversity Bullies went after the mortgage market.

To keep in context, this isn't happening in a vacuum. As discussed here and here by fellow moneterists Peter Robinson, the Fed is responding to an equally unprecidented fall in velocity.

Payback is a b1tch - nobody rides for free. The Financial Ninja tells it better than I can - read it all.

Hat tip Powerline.

No comments: