John Williams just issued a warning regarding the Monetary Base vaulting to a historic high. Williams, who founded ShadowStats, also stated the reason for the expansion is directly related to a deepening systemic solvency crisis. Here is what Williams had to say about the situation: The seasonally-adjusted St. Louis Fed Adjusted Monetary Base just jumped to an historic high level in the two-week period ended February 22nd, as shown in the (above graph). The movement here largely is under direct control of the Fed’s Federal Open Mark Committee (FOMC) and is suggestive of a deepening systemic solvency crisis.”
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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