by Michael Snyder, The Economic Collapse Blog:
A lot of people have been waiting for a meltdown of America’s financial system, but the truth is that it is already in the process of melting down. As you will see below, the size of the monetary base in the United States has gotten more than six times larger since 2008. If we continue down this road, it won’t be too long before we start looking like Germany during the Weimar Republic. But if we stop creating money at a feverish rate, we won’t be able to service our debts and we will plunge into a very deep economic depression. Those that run things desperately want to avoid short-term economic pain, and so they just continue to take the easy way out. Unfortunately, taking the easy way out time after time will only lead to heartache.
TRUTH LIVES on at https://sgtreport.tv/
Instead of examining M1 or M2 as many others tend to do, in this article I am going to look at our monetary base. If you are not familiar with that term, the following is how Investopedia defines it…
The monetary base is the total amount of a currency in circulation or held in reserves. Money in circulation is anything that is held and used by the general public while reserves refer to commercial bank deposits and any money held in reserves by these institutions at the central bank.
For most of our history, the growth of our monetary base was very stable.
But then the financial crisis of 2008 arrived, and it started growing at an exponential rate.
As you can see from the chart below, the size of the monetary base went from less than a trillion dollars in 2008 to nearly six trillion dollars today…
There tends to be a lag between when the monetary base rises and when we see prices increase throughout the economy.
For example, the dramatic spike in the monetary base that we witnessed in 2020 did not immediately cause prices to soar.
But in 2021 and 2022 we certainly felt the pain.
Throughout 2022, the size of the monetary base was actually falling as the Federal Reserve attempted to battle inflation, and that resulted in prices moderating to a certain extent in 2023.
Unfortunately, the size of the monetary base started to go back up in early 2023, and now it is rising very sharply once again.
That is definitely not good news for U.S. consumers in 2024 and beyond.
We certainly don’t need more inflation, because just about everything has become painfully expensive these days. The following comes from CNN…
From the historically unaffordable housing market and budget-breaking day care rates to high car prices, the United States has a cost of living problem many years in the making.
Parents of young children are making difficult choices to afford child care — or they’re opting to evade it by dropping out of the workforce altogether.
Parents are also struggling to buy bigger cars to haul around their growing families while simultaneously socking away some money in college savings plans.
For too many, the American Dream feels like an illusion.
So why don’t those in charge stop creating so much money?
Well, the truth is that if they stop we won’t be able to service our rapidly growing debts.
Today, U.S. consumers are 17 trillion dollars in debt, corporate debt is at the highest level ever, state and local governments are drowning in debt, and the federal government is 34 trillion dollars in debt.
Read More @ TheEconomicCollapseBlog.com
