US Money Supply: Ad Astra

US Money Supply, AMBSL, measured monthly from January 2003 to March 2013

The chart above shows St. Louis Adjusted Monetary Base (AMBSL, black line, measured monthly) for the period January 2003 to March 2013. We can see that until the depths of The Great Recession growth in the supply of money was relatively benign; in fact the money supply increased, on average, by roughly 3% per year for the period January 2003 to July 2008. This is consistent with a gradual expansion of the money supply inline with growth in GDP.

But in September, 2009 the money supply started expanding sharply in four distinct waves. The total expansion approaches 217%, but where are the benefits? Unemployment is still, by some accounts, increasing even as economic growth remains very, very questionable.

And the bill for all this financial largesse you ask? Oh yes. The bill will have to be paid.

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