Re: John Williams: Warning - Monetary Base Spikes to Historic Level

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The extreme growth in the monetary base of recent years has not translated into rapid money supply growth and inflation, yet, because banks have been depositing their funds as excess reserves with the Fed, rather than lending the money into the normal flow of commerce.
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I always wonder about such talk. This is an obvious way to channel inflation where they want it and that is in assets like housing. The problem is of course that you can't push a string so all that money slushes around until it becomes visible again.

But since all things showing real inflation are excluded from the inflation calculation we may never see a high CPI value even though a good cultured organic pound of butter is now $12-16 in some retail settings.. Of course the CPI will sustitute 'I can't believe its not butter'...



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