Hat Trick Letter (Archive Edition) – Part 1: The Money Printing Never Stopped
Originally published: 2 December 2011
Original author: Dr. Jim Willie ("The Golden Jackass")
Navigation: | Part 1 | Part 2 | Part 3 | Part 4
Editor's Note
This Archive Edition preserves the original article while improving readability through editorial headings, paragraph spacing and navigation. The author's views and arguments have been preserved.
The Illusion that Quantitative Easing Ended
The US Federal Reserve has fooled a lot of people into believing that the grand monetary pump and debt monetization project has been put on hold.
The only thing that changed was their talking publicly about it. The money press has been working to the limit, never stopped. The discussion has been kept quiet, but the machinery still operates with vigor.
The proof is not statements by central bankers, but the data from the monetary aggregate. The data is compelling.
The conclusion to reach is that Quantitative Easing has become the norm, the foundation policy, the emergency action to prevent implosion of the US banking system.
Hyper monetary inflation is the New Normal.
"The money press has been working to the limit, never stopped."
A Parabolic Expansion of the Money Supply
The increase in the money supply has gone parabolic.
The end is nigh, but not till after the US elections.
The mainstream analysts are only beginning to notice that the credit-based system is collapsing, while the central bankers have been busy turning off alarms, and the inflation engines labor on.
Von Mises put it so clearly, that inflation always has been a matter of money growth. It always will be.
Historical Image Notice: The original chart accompanying this section was part of the 2011 publication.
Following the Monetary Data
Notice in the yearly monetary aggregate chart, where ticks are full years, that the 2010 and 2011 years show a steady linear growth. The money supply never stopped growing in summer 2011. The fictional June deadline came and went, and nothing changed, only the words from the increasingly desperate central bankers.
The money supply is still growing.
The data contradicts the premise that the QE program was terminated. Easily explained. The initiative turned global to produce Global QE.
The USFed has been accommodating the Europeans and Wall Street banks, so that the teetering insolvent big Euro banks can be propped with more effortless money of diminishing value.
Global Quantitative Easing
The massive Swap Facility announcement of the 30th November served as an exclamation point, in reaction to a near calamity as numerous big European banks almost failed. The official story omitted that detail.
One must make conclusions without the aid of the financial press. The Euro Central Bank has drawn in heavy volume from the USFed Dollar Swap Facility. Without bond market buyers, the EuroCB has reluctantly filled the void and has been buying the Italian Govt Bonds.
Recall that big Euro banks are huge sellers of sovereign bonds. The USFed never stopped printing money to buy USTreasury Bonds, which ramps up each month as USGovt debt piles up each month.
Recall that foreign creditors are net sellers of USTBonds. The USTBond auctions have not failed, and for a reason.
The USFed is buyer of last resort.
Where the bids came from has been kept quite secretive. It is the USFed, which never stopped QE, and a few dutiful allied central banks.
In fact, Global QE is the mainline policy nowadays, and it has turned into hyper-inflation without the fanfare.
"Many enlightened people are wondering if QE3 will emerge when QE never ended!!"
Continue Reading: Hat Trick Letter (Archive Edition) – Part 2: The New Normal of Global QE →
Series Navigation
- Part 1 – The Money Printing Never Stopped (Current)
- Part 2 – The New Normal of Global QE
- Part 3 – The Unintended Consequences
- Part 4 – The Grand Divergence
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