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The effect of the bailout(s) and 1% fed funds rate on the money supply

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radical capitalist posted on Wed, Nov 5 2008 10:14 AM

Does anyone have any data on precisely how much the money supply has been and is going to be increased by the recent bailouts and the lowered fed funds rate?

People are talking about the "unprecedented injection of liquidity" and so forth, but I am curious as to whether this increase is in the neighborhood of .01%, .1%, 1%, 10% of total money supply.  I know they stopped publishing the M3 stat, so that makes it difficult.

Also, most of the funds have yet to be unleashed on the nation, so does anyone know about the effect that it will have going forward.

Thanks

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Bogart replied on Wed, Nov 5 2008 11:29 AM

The St Louis Federal Anti-Reserve publishes this stuff so that would be the logical starting place.

 

As for the effects of all this fiat money.  No-one knows, not even the Federal Reserve.  Certainly the cabal of banks Goldman Sachs, JP Morgan, etc and the government itself will benefit.  As for the bubbles that this "capital" (I laugh when stupid pundits describe it that way) creates, we won't know them until we are in them.  And then the Federal Anti-Reserve will deny they are actually in the bubble and that something has changes.  That is until it bursts then the Federal Anti-Reserve will create more "capital" causing other bubbles.

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DougM replied on Wed, Nov 5 2008 4:58 PM

It appears that M2 increased by 3.34% (from 7668.9 billion to 7925.2 billion) between September 8 and October 20.

[View:https://research.stlouisfed.org/fred2/fredgraph?graph_id=9767&category_id=827#:3:2]

https://research.stlouisfed.org/fred2/fredgraph?graph_id=9767&category_id=827#

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M0 (physical cash) has increased a lot but M1 and M2 haven't increased that much due to banks increasing their reserves.

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Thanks Doug and Bill - that site is just what I was looking for.

 

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