US Monetary Base Chart (Dec 2012)

US-monetary-base

The chart above (from the St Louis Fed) shows the exponential growth of the base money supply (also known as M0) of the United States. (From Wikipedia) “The monetary base is highly liquid money that consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks’ reserves with the central bank.”

Notice the sharp increase of the base money supply during the 2008 crisis which show massive bailouts and monetization of debt.

US-monetary-base-1918

If we look at the same monetary base chart all the way back to 1918 as seen above, we can see that it took about 90 years for the monetary base to grow to about $800 billion dollars. That’s nearly a century mind you. In the financial crisis of 2008, it took just 3-4 weeks after the collapse of Lehman Brothers for the US to double its monetary base to $1.6 trillion dollars. Doubling the monetary supply in a matter of weeks! What kind of wealth is this if it can be conjured out of thin air and doubled so easily in such large quantities!

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