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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (18843)	3/19/2009 11:47:53 AM
From: Tommaso	Read Replies (2) \| Respond to of 71442

I was just doing some review reading in Samuelson's classic economics text. You put the bank multiplier at 9X and you may be right. The classic (U.S.) fractional reserve multiplier is 5X. So if Bernanke's $300 billion in bond purchases turns into a $1,500 billion money expansion, that's a doubling of the monetary base. But the monetary base has already approximately doubled since last year, so that could mean a quadrupling of money supply. Too many variables for exact arithmetic. But what we are talking about is an annualized inflation rate before too long of something between 15% and 30%, the latter figure being very close to hyperinflation. I tend to define hyperinflation in psychological terms, as the stage at which much economic activity consists of getting rid of money.