Don’t even try to tell me this is QE 2. If it was then the monetary base should have spiked in late 2010, NOT in 2011.
No, this is the Fed FREAKING OUT about the financial system again. And it’s a freak out on par with 2008. (Source)
As always, the stimulus money goes to Wall Street and the bill goes to us.
There is only one period in which the Fed engaged in a similar amount of money pumps. And that was… during the depth of the 2008 Crisis from October- December 2008 (the two periods are comparable as the Fed didn’t have QE2 in 2008).
This of course leads one to ask, “what is the Fed combating now?” And it’s not just Japan (the adjusted monetary base went vertical back in January). So what is requiring $200 billion per month?
Also, we need to consider just how desperate the Fed is. QE 1 saw the Fed pumping $50 billion per month into the financial system. QE 2 saw $100 billion. Now we’re at $200 billion per month.
And people are even debating whether the Fed can tackle the Crisis? Folks, the Fed is losing control by the month (QE 1 lasted over a year). QE 2 has only been going five months and already the Fed is DOUBLING the amount of money it puts into the system!?!? (Source)
- Federal Reserve Tells: Something Big Is Going Down And It’s Not Good (gunnyg.wordpress.com)