US money supply growth hit another all-time high in February as the Federal Reserve continues to churn out dollars and inject them into the economy.
As measured by the True Money Supply Measure (TMS), the money supply grew by 39.1% year-on-year. That was up slightly from January’s record growth of 38.7%.
Last month, Federal Reserve Chairman Jerome Powell testified before Congress. In his answer to one question, it sure did sound like he doesn’t believe in the basic economic principle of supply and demand. Peter Schiff talks about it in this clip from one of his podcasts.
Last month, gold broke its all-time record price. As we have explained, to really understand what’s going on, you need to flip the equation. Dollars are at an all-time record low compared to gold. Simply put, the recent surge in gold prices is all about currency debasement.
We were on this path long before coronavirus reared its ugly head. After all, this gold bull market started back in 2015. But the government response to the pandemic put the process in hyperdrive. In March, the Federal Reserve embarked on a policy of money printing to infinity and beyond. And there is no end in sight. The Fed is apparently even willing to turn the other way the inevitable result of printing money – price inflation – begins to become apparent in the economy.
After the stock market tanked last week, the Trump administration tried to do damage control and talk the economy back up. In his podcast, Peter Schiff said the damage control fell flat. In fact, everything the government is doing claiming to help isn’t helping at all.
The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies.
According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the 1970s – the era of stagflation.
Once upon a time, quantitative easing was considered an “extreme measure.” But it may become more commonplace. According to a Reuters report, central bankers in the US are discussing whether they should turn to that “tool” more often.
In other words, the Fed may make the “extreme” the norm.