The Fed is Now Pumping $200 BILLION Per Month

Phoenix Capital Research's picture

… and we
just passed $200 billion per month.


I’ve shown
the below chart before in other pieces. However, given its significance, it
deserves regular review.



This is a
chart of the adjusted US Monetary Base. It’s essentially a very simple means of
charting how much money the US Federal Reserve is pumping into the system (on
top of QE 2 which is providing another $100 billion in liquidity per month).


As you can
see, starting in January 2011, the Fed left a paperweight on the “print”
button. Since that time, it’s put $500 BILLION into the system. When you
combine the $100 billion in liquidity provided by QE 2, we’re talking about
$800-900 billion enter the financial system in 2011 alone.


There is
only one period in which the Fed engaged in a similar amount of money pumps.
And that was… during the depth of the 2008 Crisis from October- December 2008
(the two periods are comparable as the Fed didn’t have QE2 in 2008).



This of
course leads one to ask, “what is the Fed combating now?” And it’s not just
Japan (the adjusted monetary base went vertical back in January). So what is
requiring $200 billion per month?


Also, we
need to consider just how desperate
the Fed is. QE 1 saw the Fed pumping $50 billion per month into the financial
system. QE 2 saw $100 billion. Now we’re at $200 billion per month.


And people
are even debating whether the Fed can
tackle the Crisis? Folks, the Fed is losing control by the month (QE 1 lasted
over a year). QE 2 has only been going five months and already the Fed is
DOUBLING the amount of money it puts into the system!?!?


In plain
terms, the Fed is losing its grip on the markets. I don’t know when the
currency markets will say “enough” but when they do the collapse of the US
Dollar will be rapid and violent. This is not conjecture, this is FACT: Weimar Germany’s
hyperinflation exploded onto the scene .


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mind_imminst's picture

The whole purpose of all the printing and bailouts was to prevent a "great recession" or depression or whatever. If the Fed and Treasury stop now, allow the dolllar to shoot to the moon and interest rates rise like an elevator in the Burj Kalifa, then stocks will drop and the economy will tank and a lot of people will be pissed that the "bailouts" didn't work. Politicians will come under fire. I don't think this kind-of trend could continue without pressure to resume printing and piling up debt. I think .gov, treasury, and the FED would rather keep printing to give them more time. I am in the camp of "once the printing press starts, it cannot stop". Even though a collapse is still fairly certain, the charade can go on longer than if QE and all other unicorn economic stimulus stops in June.

Bastiat's picture

Yes, the choice facing the Bernanke is "die today or die tomorrow," aka "death or death by Bongo."

SamuelMaverick's picture

"Hell hath no fury like a Woman scorned, or an honest Man fucked."   Well said.

Blotsky's picture

When it all goes bust and the floor finally caves in, would you be able to take you pysical dollar bills and just burn them?

It seems easy enough to say "yes", but I was thinking that the psychological connection that we seem to have to the dollar would make it difficult, even when we know that it holds no worth.

When that time comes, see just how easy it would really be; it might surprise you.

I love denial. Damn you Tyler!

ISEEIT's picture

I don't think you guys get it. We must put more $$$'s into the system so that people can begin to appreciate them. Think of the euphoria as the bills drop from the sky.

Everybody wants some cause they are free!

That's my take on the bounce. Seems like obvious as fuck that daytraders like me are being mocked and fucked with. That's fine. Once I've covered my margin to the point that I just can't anymore?

I might suppose a bit of subversion would be in order.

Hell hath no fury like a Woman scorned, or an honest Man fucked.

css1971's picture

Damn! So how do I get my hands on this money?

I need to be a bank. What exactly is required legally to set up a bank?


David449420's picture

First Requirement.  You must be a criminal.

web bot's picture

How does one person pump $200,000,000,000.00 in a month

That`s the equivalent of a pile of $1.00 bills 12.8 miles high.

Hannibal's picture

Think: computer monkey, key stroke, digital numbers on screen, copy and paste, email to TBTF.

css1971's picture

With billion dollar bills it's easy.

You just need to think logarithmically.


Stuck on Zero's picture

The question is not : “what is the Fed combating now?”  The question is who is getting rich off the largesse of the American taxpayer?

monopoly's picture

Someone junked Tyler,. Are you kidding me. What an imbecile.

ivars's picture

There will be no hyperinflation of USD. Perhaps inflation 5-10%, but not hyper. Because USD itself is a commodity. And coming recession will take care of most prices except oil.

Oil prices 2011-2012 were charted in this Feb 6th graph. We are headed for another temporary relative minimum in the end of April, Brent around 105-110 USD.

After that, in July-September, its time for Sarah Palin to launch her bid officially.


nah's picture

1000 dollar bill lol.... try the 1000 dollar coin that would be balls on

pragmatic hobo's picture

there is a reason why Euro is going higher even as shit fall apart at seams.

SwingForce's picture

Its all Relative, said my Uncle Cornie....

SwingForce's picture

Who is going to pay this back? Not me, says Mike Krieger (where are you?).

Peak Everything's picture

"The greatest shortcoming of the human race is our inability to understand the exponential function."

Albert Bartlett

tgatliff's picture

Yes... Infinity certainly makes for is a mighty steep curve..

SwingForce's picture

Ouch OUCH Hey! My fukkin' head just exploded! I needed that gray matter to buy calls on FAZ, now you've stained my yellow helmet, I'm scooping brains... BRILLIANT!

apberusdisvet's picture

The $1000 bill could be Bernanke, but the supreme homage should be to the man who started the end of civilization as we know it,  the $10,000 bill should have the likeness of:


Mayer Rothschild.

apberusdisvet's picture

Covering the JPM silver shorts or the Comex default?

tgatliff's picture

I suspect all of the interest only home loans going bad, and the mega banks not being able to foreclose probably has something to do with it.

Either way, the worst news is no news at all.  Whatever is going on, it would seem it is serious enough that they dont want to talk about it.  

If I was a conspiracy theorist, I would say that the FED/banks are trying to hold out and use the debt ceiling debate as an excuse for their "problems"... There is a 0% chance of getting any bank bailout this time, however...

sbenard's picture

You heard it here first. The illustrious Fed Chairman's eventual nickname will be "Bubbles" Bernanke! He's earned it!

Sancho Ponzi's picture

Isn't a sizeable chunk of this excess reserves piling up thanks to Bubblicious Bennie's bond buybacks?

PulauHantu29's picture

We are going to see what Nomura sees....$220 oil and $1,800 gold.

Bastiat's picture

That would be $220 oil and $3K gold.

I am Jobe's picture

Holy shit. its over, at this rate, we might as well get Mugabe here to run the FED. I am waiting for Bens fact to appear on the 1000.00 bill. Get ready for more layoffs and more companies to roll up and die.

brodix's picture

The bigger you blow up the bubble, the bigger the holes in it get as well.

Tyler Durden's picture

As we have highlighted on many occasions, the surge in the AMB is primarily due to the SFP unwind. Every apples to apples comparison needs to eliminate $195 billion from this surge as it was artificially low to begin with.

Slartebartfast's picture

$500 Billion a month by June 2011.  $1 Trillion a month by Jan 1, 2012.  $1 Quadrillion a month by April 1, 2012.  Infinity per month by Christmas 2012.  Clock me.  I bet you a cup of coffee I'm right - payable on Jan 1, 2013.

Fox Moulder's picture

Aleph-naught infinity by Christmas 2012.


Aleph-one by that afternoon.

NidStyles's picture

Just one question, how do we buy this said cup of coffee?

iowaguy's picture

with my newly issued obama dollar

Translational Lift's picture

"newly issued obama dollar"

= you get one and have to give two back!!

lesterbegood's picture

The Fed bailing out itself? Can they do that?

NidStyles's picture

Why would they need to bail themselves out? They own the money, we just have it on loan. It would be nothing for them to simply pull the plug and end the charade.

reachsb's picture

Could it have something to do with a possible stealth bailout of the TBTF banking system? With precious metals on a tear recently, I'm sure that the 'highly capitalized' banks are encountering a renewed stress on their reserves as their depositors cash out from their fiat accounts and move into tangible assets. 

ZackAttack's picture

A Martingale only works if you have infinite funds at your disposal. Lenny Dykstra was just a piker, is the problem.

Fox Moulder's picture

So instead of Helicopter Ben we chould start calling him Martingale Ben Bernanke?

NidStyles's picture

I never thought about it that. Thank's for the lead. The question is what are they betting on?

TaxEstate's picture

Double-or-nothing.... to infinity.

Sudden Debt's picture

You guy are idols!
Without ZH nobody would know stuff like this!

Great work guys!

SheepDog-One's picture

From one freakin Ponzi bubble to the next!

66Sexy's picture


But the dollar is still over 75... after 2 rounds of QE and we're 2 months away from june.

QE has clearly failed. I would suggest one should get HEDGED into cash, because after all these bailouts and stimulus efforts the dollar is too resilient.

Rates will only go up.

Some could argue this is the perfect storm of a huge dollar RALLY.