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Obama Economy Is Tanking

March 19, 2009

To add liquidity and boost the economy, the Federal Reserve has plans to grow the money supply by another 50 percent.

The money supply has already expanded by 250 percent in the past six months.

There is about $800 billion of currency in circulation . Another $800 billion is sitting at the Federal Reserve Board, for a total supply of about $1.6 trillion.

The TARP program was to bail out banks,but the banks took only a small fraction of the money. The rest they used to help balance sheets.

Why don’t the banks want the money? They do not want to make loans in this economy. They prefer to have the cash sit at the Fed earning them interest.

The recent Fed action won’t help.

One Comment leave one →
  1. January 7, 2010 8:53 am

    Your column is right on the mark. Your readers may be interested in reading my post at Charlkes Rowley’s Blog yesterday on ‘The Federal Reserve Plays Russian Roulette with the Money Supply’

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