Taken together, the Desk anticipates conducting $850 billion to $900 billion of purchases of longer-term Treasury securities through the end of the second quarter. This would result in an average purchase pace of roughly $110 billion per month, representing about $75 billion per month associated with additional purchases and roughly $35 billion per month associated with reinvestment purchases.
So in total, we could be talking about the Fed in roughly an eight month period pumping as much as $900 billion in super money.
The key is to realize that supermoney can have a multiple impact on the money supply. In 2008, just before the financial crisis broke out, the multiplier impact on M2 was 10. Got that 10? Although, I don't necessarily expect it to go that high at this point (there are all those excess reserves). A multiplier impact of 2 or 3 is certainly not out of the question. That would put the M2 money supply increase in the range of $1.6 trillion to $2.7 trillion. In other words, an annualized money growth rate of over 20%. And this is conservative. If the multiplier is higher and money starts to flow out of excess reserves, you could see M2 grow and record high rates, possibly 30% to 40% on an annualized basis.
Folks, the dollar is now securely on the road to major devaluation. Price inflation at the consumer level by the end of 2011 will be well into double digits. Way, way into double digits
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