Monetary Base will TELL us where Silver price will GO

[Spectrism]

This article at zerohedge gives us all we need to know.


http://www.zerohedge.com/article/adjusted-monetary-base-goes-vertical

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/von%20havenstein/BASE%202.24.jpg


Adjusted Monetary Base Goes Vertical
Submitted by Tyler Durden on 02/24/2011 20:54 -0500

Just in case there was any confusion in the interpretation of the M2 chart, here is the latest just released Adjusted Monetary Base.

A succinct reminder from Mises Institute: "The Adjusted Monetary Base is the one monetary component completely under the control of the Federal Reserve." As we expected a month ago when predicting the end of the SLP program, look for this chart to surge to about $2.7 trillion as the combination of SLP unwind and another $500 billion in UST purchases adds another $600 billion to the BASE. The increase of $142 billion in the last two weeks is the 5th largest Adjusted Monetary Base expansion in history. The ongoing verticalization of this chart may result in some further acuteness of inflationary expectations.

And some other pretty charts:

•MZM
•Adjusted Reserves
•Commercial Paper Outstanding

(see links at link)

This jump in Jan & Feb looks like a panic attack to fend off deflation and depression. The cost will be the value of the federal reserve note. In these last 2 years we saw silver go from under $12 to more than $30. I expect to see the price of silver more than double THIS year. Here is why. The dollar will be devalued and large pockets of cash will go into PMs and other assets. The ability to get the metals will fail and this will drive prices further by scarcity.

There is one risk that could drive everything down..... world calamities and wars that make only essentials of any value. Food, energy, safety (arms) will be first echelon. If the worst SHTF scenario plays out early, PMs need to be put away.

It looks like they are driving the dollar down and the scheme seems pretty obvious.

[Ares]

Buy what you can now boys and girls, the ride is going to get a lot more interesting.

[Spectrism]

Anyone know where all that money is going? Somebody has been getting some serious bailouts.

[Neuro]

Anyone know where all that money is going? Somebody has been getting some serious bailouts.
It stated in the article that the current increase is due to QE2... Wasnt the monetary base 800 Billion or so in 2007-8?

[Spectrism]

source-
http://mises.org/Community/forums/t/3992.aspx


According to the St. Louis Federal Reserve publication Monetary Base in an Era of Financial Change, the adjusted monetary base is an index that measures the effects on a central bank’s balance sheet of its open market operations, discount window lending, unsterilized foreign exchange market intervention, and changes in statutory reserve requirements.

The Adjusted Monetary Base is the one monetary component completely under the control of the Federal Reserve.

So this would include documented dispersements to the banks and regulation of bank reserve holdings. I don't think this is even anything to do with QE2. I don't think it includes zombie mortgage purchases by Fannie or Freddie either.


This current expansion in the Adjusted Monetary Base is the largest expansion since the statistic has been being tracked. This expansion is larger than the expansions during the Y2K/"dot com bubble" and the attacks of September 11th, which some have suggested acted as the catalyst for the current crises.

I recall the prelude to Y2K... massive influx of capital. While we have had enormous money destruction in defaults, loan payments and restructuring, I think the short term money pumping will potentially sap a big chunk out of dollar value. Whether there will be a new wave of "natural" money multiplication (consumer borrowing) I really doubt that for the next 18 months. The inability for many people to buy things will have an interesting effect on prices. I think we will see very tense schizoid markets with businesses unable to drop prices and consumers unable to ante up.

[Trinity]

Anyone know where all that money is going? Somebody has been getting some serious bailouts.

So far according to the fed this is where the money went.

1.2 trillion spent on government bonds.
960 billion spent buying junk securities from bankers.
150 billion spent on fannie/freddie junk securities.
90 billion spent on maiden lane properties (junk real estate).

Here is the site http://www.federalreserve.gov/releases/h41/current/

Tell you the truth I think the fed is being pretty nice giving all these people a life line. If it were me I would have told all these dead beats to eat mud.

[Trinity]

It stated in the article that the current increase is due to QE2... Wasnt the monetary base 800 Billion or so in 2007-8?

Yes and at the time it was mostly currency, a little bit of short term government bills, a small amount of Gold, and a small amount of SDR's.

[FunnyMoney]

Hyperinflation, not a matter of if, just a matter of when.

[Trinity]

Sorry wrong chart, here is the one you want for the feds junk buying spree.

[Ponce]

Anyone know where all that money is going? Somebody has been getting some serious bailouts.


Very good question Spec......ALLLLLLLLLLL this money that is now GONEEEEEE, but where to ?.....as far as I am concerned is all gone to the Federal Reserve, after all, they are the one that came out with all those ones and zeros that makes up the market of make believe......all that they are doing is to pull back in all those number that they put out to start with when they created money from nowhere..........what they did was to pull in all good money, in interest, that was made by the honest job market so that now everyone is like in the story of "The Emperador Has No Clothing" but just about everyone is scared to admitted.

As long as the US government keeps on patronizing the Federal Reserve we will have a rope around our necks.

[Spectrism]

This last blip (Jan & Feb 2011) tells me that they are not going to get market purchases of bonds and the federal reserve will have to take those on. The gig is up and they are just pretending for the illiterate masses who think Obama will save them or a government program makes money and value.

They will print money on Amerikan debt (still borrowed) for a while and the last stop will be printing money and giving it away.

[Cobalt]

Maybe we all should just add a couple zeroes to the balance in our checkbooks, shit their make believe zeroes can't have any more value then our make believe ones do

[Neuro]

Sorry wrong chart, here is the one you want for the feds junk buying spree.



http://gold-silver.us/forum/index.php?action=dlattach;topic=22077.0;attach=647 8;image
That chart pretty much proves that the Federal Reserve triggered the recession, they started selling securities just prior to the onset, and when they were done with the selling they had almost sold half of the securities they had, they took $350-400 Billion in liquidity from the market in early 2008... At the same time Bernanke and Paulson were harping on about, how the economy was essentially strong, they knew full well that it was going to crash, because they crashed it. And when it crashed, they filled the pockets of the Federal Reserve owners.

Hang Bernanke for treason!

[Trinity]

I have to think on that one Neuro. Yes you can see they sold off some "securities" in late 2007. They knew that would put a money squeeze on the financial system causing a deflationary scare. That would be good for bonds and bad for stocks,commodities. Then they come back to the rescue stronger than ever. This will cause inflation. Still trying to figure out why they went this route.

[Neuro]

In deflation people default on their obligations and lose their underlying assets. The fed knows that the US dollar is inherently worthless, but not the houses, lands, stocks, they can get way more with strong bonds and currency and collapsed real estate values... But if they uproot people take away their assets, it eventually will mean trouble, civil unrest etc... But people are still living in their difficult to foreclose houses, knowing that if they start making waves, the Sheriff will come and dump them on the street... Maybe the purpose of foreclosure gate is to leave people in limbo for the time being?

[Sparky]

...
Tell you the truth I think the fed is being pretty nice giving all these people a life line. If it were me I would have told all these dead beats to eat mud.


Technically, it was you who gave them a life line, since they used your money.

[solid]

In deflation people default on their obligations and lose their underlying assets. The fed knows that the US dollar is inherently worthless, but not the houses, lands, stocks, they can get way more with strong bonds and currency and collapsed real estate values... But if they uproot people take away their assets, it eventually will mean trouble, civil unrest etc... But people are still living in their difficult to foreclose houses, knowing that if they start making waves, the Sheriff will come and dump them on the street... Maybe the purpose of foreclosure gate is to leave people in limbo for the time being?


That's deep Neuro, that same person living in their once owned home is now a prisoner living in a foreclosed home in limbo. Same living situation, but difference circumstances. It's the government's way of taking freedom away in the form of fear, which is the obvious tactic of them.

[mick silver]

an Fannie or Freddie are asking for a bailout once again ... lets all wait an see how much they get again

[Trinity]

Technically, it was you who gave them a life line, since they used your money.

Disagree. My reasoning? First these purchases by the fed were made by "expanding their balance sheet" so in effect they diluted their currency. Second I say they used "their" money because on the face of a dollar bill it says " Federal Reserve Note" not "Trinity Note" meaning it is their money or credit that I use to earn a living, not mine. Does it concern me that the fed is cheapening the money I work for? Yes, hence the Gold and Silver.

[Ponce]

Well, I am in a lifeboat made of silver and with gold as a lifevest........ people can talk all that they want about this and that and the other but the final word is .........gold-silver talks, bullcrap walks.

I don't go by what the coat and ties talk about but rather by what I see and feel........and like I said before, I'd rather be a dumb Cuban refugee with a 10th grade education and have money than to be a PhD and be broke.

One thing is to love what you do and not to care about money and another to be part of the world where the ones with the most toys are the winners.........I for one loved what I did with my company and what it gave me in return.