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U.S. Money Supply Continues to Increase at Record Pace as Federal Reserve Backstops Government Spending

The federal government continues to borrow and spend at a staggering rate. On March 1, the national debt pushed above $28 trillion for the first time. This rate of borrowing wouldn’t be possible without the Federal Reserve monetizing the debt through quantitative easing. In practice, the central bank buys U.S. Treasuries on the open market, creating artificial demand for U.S. bonds. The Fed pays for these Treasuries with money created out of thin air that then gets injected into the economy.

Quantitative easing has continued over the last year at a record pace, and this is reflected in the growth of the U.S. money supply.  Money supply growth hit another all-time high in February as the Federal Reserve continues to churn out dollars and inject them into the economy.

As measured by the True Money Supply Measure (TMS), the money supply grew by 39.1 percent year-on-year. That was up slightly from January’s record growth of 38.7 percent.

To put the growth in money supply into some historic perspective, the rate in February 2020 was a mere 7.3 percent, which was a healthy increase from the under 2 percent growth we were seeing in 2019.

February marked the eleventh month of remarkably high money supply growth in the wake of unprecedented quantitative easing, central bank asset purchases, and various stimulus packages.

Money supply growth also broke a record as measured by M2. By the more traditional measure, the money supply grew 27.0 percent. That compares to January’s growth rate of 25.9 percent. M2 grew 6.8 percent during February of last year.

The “true” or Rothbard-Salerno money supply measure (TMS)—is the metric developed by economists Murray Rothbard and Joseph Salerno, and is designed to provide a better measure of money supply fluctuations than M2. This measure of the money supply differs from M2 in that it includes Treasury Department deposits at the Fed (and excludes short-time deposits, traveler’s checks, and retail money funds).

Historically, the growth in the money supply has never been higher with the 1970s being the only period that comes close.

Ryan McMaken at the Mises Institute says the growth in the money supply won’t likely slow anytime soon.

It appears that now the United States is nearly a year into an extended economic crisis, with around 1 million new jobless claims each week from March until mid-September. Claims have remained above 600,000 every week since. Moreover, more than 3.8 million unemployed workers are currently collecting standard unemployment benefits, and total unemployment claims have failed to fall back to non-recessionary levels, even a year after lockdowns began. More than seven million additional unemployed are collecting “Pandemic Emergency Unemployment Compensation” as of February 27.

“The central bank continues to engage in a wide variety of unprecedented efforts to ‘stimulate’ the economy and provide income to unemployed workers and to provide liquidity to financial institutions. Moreover, as government revenues have fallen, Congress has turned to unprecedented amounts of borrowing. But in order to keep interest rates low, the Fed has been buying up trillions of dollars in assets—including government debt. This has fueled new money creation.”

You might be tempted to say, “So what?” This is just government number-crunching. It really has no effect on me.

But it does.

By definition, an increase in the money supply is inflation. And inflation is a hidden tax on every American.

As the Fed creates more and more dollars, the dollars that you have in your wallet and in your bank account become worth less and less. Inflation particularly impacts the poor, those on fixed incomes, and people trying to save. We see the effects of inflation in rising prices. While the powers that be insist inflation isn’t a problem, it relentlessly chips away at your purchasing power. You know this if you’ve been to the grocery store or gas station recently.

The level of inflation we’re seeing today (remember, money creation is by definition inflation) poses a grave danger to the economy. It could ultimately result in hyperinflation. The U.S. has escaped the fate of Zimbabwe and Venezuela so far, but just because price inflation hasn’t gotten out of control yet doesn’t mean it won’t.

Financial analyst Peter Schiff warned months ago that all of the people who think this can go on forever are in for a rude awakening. Things that can’t go on forever don’t.

Just because we’ve gotten away with it for this long doesn’t mean we’re going to get away with it forever. … I think we’re very, very close to a major collapse of the dollar, a major breakout in the price of gold, to a breakdown in the bond market. And it isn’t going to happen overnight. It’s going to sneak up on people when they least expect it. … It’s not a crisis until it becomes a crisis. And then it becomes a crisis very, very quickly.

The Federal Reserve is the engine that runs the biggest most powerful government in the history of the world. Without the central bank monetizing the debt, the federal government would find it impossible to continue its massive warfare and welfare state.

Money is power and the Federal Reserve serves as an unlimited spigot pumping dollars into the system, enabling the biggest government in the history of the world to keep on truckin’. Without the Fed, there would be no foreign wars. There would be no massive, unsustainable social programs. There would be no police state. There would be no corporate welfare programs. The federal government would truly be limited.

If you want to end unconstitutional, overreaching federal power — end the Fed.

The post U.S. Money Supply Continues to Increase at Record Pace as Federal Reserve Backstops Government Spending first appeared on Tenth Amendment Center.

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The United States Has Become A Banana Republic

This article was originally published by Michael Snyder at The Economic Collapse Blog. 

If we continue destroying the U.S. dollar at our current pace, toilet paper will eventually be more valuable than U.S. dollars.  I know that sounds absolutely crazy, but it is true.  Once the COVID pandemic hit the United States, those that control the levers of power in this country decided to go “full Weimar” and they never looked back.

As a result, the size of our money supply is rising at a rate that would have been unimaginable just a few short years ago.  To illustrate what I am talking about, I would like for you to check out this chart that was posted on Twitter by James Turk.  As you can see, M1 was up by more than 50 percent in 2020.

We’ve never had a year like that in all of U.S. history.  What we are doing is literally insane, but most Americans aren’t even aware of what is happening because the mainstream media isn’t talking about it.

If you are not familiar with “M1”, here is a definition that comes from Investopedia

M1 is the money supply that is composed of physical currency and coin, demand deposits, travelers’ checks, other checkable deposits, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to cash. However, “near money” and “near, near money,” which fall under M2 and M3, cannot be converted to currency as quickly.

When new money enters the system, every dollar that you are currently holding becomes less valuable.

And if your paycheck does not rise at the same rate that the money supply is rising, that means that your paycheck becomes less valuable as well.

It is helpful to think of our money system as a pie.  When more dollars are added to the pie, your share of the pie steadily becomes smaller.

So who does benefit when the pie is expanded?

The ultra-wealthy do, and I will discuss that more below.

But first, I wanted to share another chart with you.  The first chart from James Turk showed how M1 has been rising on a percentage basis, and this next chart which comes directly from the Federal Reserve shows how M1 has been rising on an absolute basis…

Just look at that for a moment.

It truly is breathtaking.  M1 has literally been rising at almost a vertical rate, and it makes all of the inflation that has come before look almost meaningless.

This is why the stock market keeps hitting record high after record high.  Stocks started to crash when COVID first started to spread in the United States, and the Federal Reserve decided to do whatever was necessary to rescue the markets.  The “unprecedented” response that we witnessed ended up being “a key driver of billionaire wealth” in 2020…

A key driver of billionaire wealth concentration was the unprecedented monetary policy response to stabilize financial markets in the early days of the pandemic, which spurred the stock market’s gravity-defying rise. When Wall Street was on the verge of panic in March, the Federal Reserve intervened with the promise of low rates and an open-ended liquidity spigot.

In addition, Congress just kept passing “stimulus package” after “stimulus package” in a desperate attempt to “rescue” the economy.

But in the process, they borrowed and spent trillions of dollars that we did not have, and that also helped to fuel our transition into hyperinflation.

The good news is that hyperinflation is not showing up at the grocery store or at Walmart yet.  Eventually, it will happen, but so far consumer prices are just rising at a pace that is quite a bit brisker than usual.  Where we are seeing hyperinflation is in stock prices, high-end real estate in rural and suburban areas, and in other areas of the economy that the ultra-wealthy have been pouring their money into.

Despite the fact that we just endured one of the worst economic years in U.S. history, 2020 was actually a banner year for billionaires

Between roughly mid-March and Dec. 22, the United States gained 56 new billionaires, according to the Institute for Policy Studies, bringing the total to 659. The wealth held by that small cadre of Americans has jumped by more than $1 trillion in the months since the pandemic began.

According to a December report issued jointly by Americans for Tax Fairness and the Institute for Policy Studies using data compiled by Forbes, America’s billionaires hold roughly $4 trillion in wealth — a figure roughly double what the 165 million poorest Americans are collectively worth. The 10 richest billionaires have a combined net worth of more than $1 trillion.

Last year the rich got a whole lot richer, and the poor got a whole lot poorer.

As I discussed the other day, 2020 was a “personal financial disaster” for 55 percent of all Americans.  The year ended with close to 20 million Americans still receiving government unemployment benefits, and poverty and homelessness have been exploding all around us.

In some cases, people were waiting in lines that were up to 12 hours long just to get a couple of bags of groceries at food banks around the nation.  We haven’t seen anything like this since the Great Depression of the 1930s, and many are expecting things to get even worse in 2021.

And with each passing day, more businesses are closing and more Americans are being laid off.

The retail sector has been hit particularly hard.  The following comes from Axios

Malls are going belly up. Familiar names like J.C. Penney, Neiman Marcus and J. Crew have filed for bankruptcy. Increasingly, Americans’ shopping choices will boil down to a handful of internet Everything Stores and survival-of-the-fittest national chains.

And what we have experienced so far is just the tip of the iceberg.  One recent report projected that “100,000 brick-and-mortar U.S. retail stores will close by 2025”

A research report from UBS predicts that 100,000 brick-and-mortar U.S. retail stores will close by 2025, in a trend that started before the pandemic and has accelerated amid coronavirus-related shutdowns.

Our national landscape is already littered with abandoned stores and restaurants, and they are telling us that it is only going to get worse.

What is our country going to look like as this process plays out?

Of course our authorities will just respond to every new crisis by printing even more money.

That is what they did down in Venezuela, and now just about everyone in Venezuela is a millionaire.

But most of those “millionaires” are living in crushing poverty because the money is absolutely worthless.

Sadly, many other countries are doing the same thing that the U.S. is doing, and so this hyperinflationary spiral is not likely to end any time soon.

But let there be no doubt that we are also in a global economic depression.  Global GDP is about 8 percent lower than it was before the pandemic started, and the outlook for 2021 does not look promising at all.

If you think that there is a way for this economic story to end well, just go back and look at the M1 chart from the Federal Reserve one more time.

Every other time this has been tried in human history, the story has ended badly.

Our story is going to end badly too, and every American needs to get prepared to survive in a very painful hyperinflationary environment.

***Michael’s new book entitled “Lost Prophecies Of The Future Of America” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael Snyder and my brand new book entitled “Lost Prophecies Of The Future Of America” is now available on Amazon.com.  In addition to my new book, I have written four others that are available on Amazon.com including The Beginning Of The EndGet Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned)  By purchasing the books you help to support the work that my wife and I are doing, and by giving it to others you help to multiply the impact that we are having on people all over the globe.  I have published thousands of articles on The Economic Collapse BlogEnd Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on FacebookTwitter, and Parler, and anyway that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with as many people as we possibly can.

 

The post The United States Has Become A Banana Republic first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

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13 WINNERS IN 2020: URGENT ALERT!

This article was contributed by James Davis of Future Money Trends. 

Momentum is FULLY RESTORED in the stock market. It’s QUITE EVIDENT that this isn’t a BEAR MARKET BOUNCE and we probably won’t retest the lows of March 2020, contrary to what many forecasters had been predicting. Instead, we’re at the GROUND FLOOR of what could only be described as the last GREAT CYCLE of American dominance before the dollar goes under the guillotine.  

When the MARCH PANIC occurred, we were on the other side of that trade and we DID WELL. Once the FED slashed rates TO ZERO, we made and published this WATCH LIST, and it has resulted in SEVEN potentially filled orders, all delivering +25% gains. The following dipped to their mentioned LIMIT PRICES and have rallied with the indices: AXP, VFC, UGI, LEG, HSY, SWK, and TRV. You’ll notice that these are all WORLD-CLASS companies, from credit cards to apparel, from utilities to furniture, from chocolate to work tools and even insurance.

Nothing MOVES UP in a straight line so we HEDGED OUR BETS and released a second WATCH LIST in case markets cooled off (and they did in early June), offering a SECOND CHANCE. Even the five companies that dipped below their mentioned LIMIT PRICES are up in a major way. Among them, Trane Technologies (TT) is up 38.8% and Axis Capital (AXS) is up 24.3%. CINF is up 34.4% and MMM and SYY are the two remaining winners.

The limit order prices on these watch lists still stand but most of these have LEFT THE STATION already so we’re publishing our THIRD WATCH LIST today, comprised of fewer companies (since there are fewer bargains), but we’ve CAREFULLY SELECTED them.

Courtesy: Zerohedge.com

This spike in the M2 MONEY SUPPLY, which is unprecedented, can’t be bottled back up.

For many years, while the ECB and BOJ (European Central Bank and Bank of Japan) were going around with slogans saying they’ll print as much as needed and keep rates at zero or negative for as long as needed and will do anything to avoid deflation, the Federal Reserve wasn’t promising the world to investors.

It kept the hope alive that the GENERAL PLAN is actually to go back to normal rates.

The coronavirus has made this impossible. It means that money will not FLOOD INTO the American enterprise system with the same enthusiasm it did in the 2010s.

That is expressed in the chart below, where we can see the dollar IS WEAKENING, but I want to see it dipping below the support of late 2017 levels in order TO BE CERTAIN.

Courtesy: Zerohedge.com

FutureMoneyTrends.com believes that in September and October, while the president is busy with the November elections and Congress is AT A DEADLOCK, markets might slow and retrace some of the gains made.

We expect “reality” to enter into the minds of the day-trading mania and we anticipate the CRAZY EXCITEMENT that investors are feeling to wane.

Fund managers SHARE THIS VIEW, with many more of them believing this is a “W”-shaped recovery.

There’s no doubt that many issues have remained unsolved and the stimulus money in most countries is DRYING UP.

Courtesy: Zerohedge.com

We don’t believe in a DEEP “W,” though.

Instead, we anticipate a quick downturn, almost unfelt.

The amount of LIQUIDITY EXPANSION that central banks and governments have provided will overwhelm any slowdown, but the price we’ll have to pay as a society is that the global reset will be HASTENED and will COME SOONER than most think.

This is the LAST BOOM before the world switches away from the dollar in this decade.

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How The Central Bank Makes You Poorer

Everything that we’ve been subjected to since the start of this coronavirus plandemic has all come back to the Federal Reserve.  Central banking has been, and always will be one of the biggest scams ever perpetrated on the public at large.

Unless you have your head in the sand, you’ve probably realized that governments and central banks can create money out of thin air and in unlimited amounts. The United States and the Federal Reserve have been creating money from nothing for years because they had exhausted all their monetary policies.  Every time they create more money, we all get poorer, yet those already at the top get richer.

Of course, they take care of their buddies who perform political favors first. Do you honestly still believe the government or banksters care about you? If anything good will ever come out of the plandemic it’ll be the eye-opening realization that people should have never allowed others power over them in any amount.  At some point, as history has proven, that power is ALWAYS abused. We are past that point now, and still, people think they are “free.”

It All Comes Back To The Federal Reserve: The NWO Is Being Shoved Down Our Throats

All the U.S. government is doing when they use the central bank to create fiat currency, is copying the tactics of currency debasement used by every fallen empire before it, like the Byzantines and Romans. Basic economics clearly shows that the increase of any money supply causes inflation and reduces purchasing power. The reason for this is because a spike in demand exceeds supply causing the prices for everything to jump higher. Every fallen empire and every modern government today has always inflated the money supply and the ‘just print more’ attitude has been infectious, reported Bitcoin News.  And that begs the question: Has the U.S. already fallen?

Politicians think they can cure the disease by just raising taxes on nearly everyone under the sun, but they claim they will take from the rich and corporations. To combat the rising inflation the common solution is higher taxes and increased austerity measures. When people ask why they can’t just print as much money as they want and just remove taxes, the question will not be answered. This is because bureaucrats expect you and future generations to pay for all of the debt with interest. A recent tweet from Coinshares executive, Meltem Demirors, notes how taxation is all part of the plan. –Bitcoin News

Robert Kiyosaki: What The Elites Don’t Want You To Know

The simple solution is to remove yourself from the Matrix they are desperate to keep you locked in. Use other money, such as gold, silver, or Bitcoin.  There’s a lot of chatter about not being able to easily spend those to purchase, but it can be done. It’s not easy to leave the system, but it’s worth it.

 

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