Fed's Record Setting Money Supply Splurge Spurs Gold's Rally

Tyler Durden's picture

From Gold Core

Fed's Record Setting Money Supply Splurge Spurs Gold's Rally

Gold’s London AM fix this morning was USD 1,720.00, EUR 1,308.98, and GBP 1,087.56 per ounce.

Yesterday's AM fix was USD 1,717.00, EUR 1,315.31, and GBP 1,090.85 per ounce.

Cross Currency Rates – Bloomberg

Gold rose $10 in Asian trading to reach $1,730/oz as investors nervously watch Greece. Just prior to European markets opening gold began to fall and has fallen below the lows in Asia and testing short term support at $1,712/oz.

The labyrinthine debt crisis rumbles on with European and Greek policy makers continuing to appear somewhat lost and lost for answers. 

Gold Spot $/oz – 5 Days (Bloomberg) 

The Greeks delayed their decision yesterday again. Greek party leaders face crunch talks again today to secure a new international bailout and avoid a chaotic debt default.   

European and Asian shares saw some looses as investor concern grows as to whether Greece would eventually be resolved or trigger contagion across the euro zone which already has many countries with increasingly shaky economies.

Major bullion banker, HSBC, said it was keeping its 2012 gold forecast for $1,850/oz due to central banks accommodative money policies. 

Platinum output in South Africa is likely to decline this year due to the increase of labour and safety stoppages, which supports the metal prices but increases the costs for producers.

While Chinese imports from Hong Kong were down sharply in December, the annual figures show a remarkable increase in 2011, Chinese gold imports from Hong Kong - tripled from 2010. There continues to be suspicions of Chinese official sector gold bullion buying.

Fed's Record Setting Money Supply Splurge Spurs Gold's Rally

The surge in the U.S. money supply in recent years has sent gold into a series of new record nominal highs. 

Money supply surged again in 2011 sending gold to new record nominal highs.

Money supply has grown again, by more than 35% on an annualized basis, and this is contributing to gold’s consolidation and strong gains in January. 

The Federal Reserve's latest weekly money supply report from last Thursday shows seasonally adjusted M1 rose $13.2 billion to $2.233 trillion, while M2 rose $4.5 billion to $9.768 trillion.

(Bloomberg) -- Gold may challenge and exceed $2,000 an ounce this year though it is unlikely to stay much above that level, said Tom Kendall, the head of precious-metals research at Credit Suisse AG’s securities unit.

The consensus estimate that gold will reach $2,000 this year prices in “bad outcomes” for the European and U.S. debt crises, Kendall said in a presentation at the Investing in African Mining Indaba in Cape Town today. 

(Bloomberg) -- Speculators raised bullish bets on commodities to a 12-week high on signs that global growth will boost demand at a time when shortages are forecast for everything from copper to palladium to cocoa.

Money managers expanded their combined net-long position across 18 U.S. futures and options by 11 percent to 823,917 contracts in the week ended Jan. 31, Commodity Futures Trading Commission data show. That’s the highest since Nov. 8. Gold wagers surged the most since September 2009, silver holdings rose for a fifth week and cattle bets climbed to a 10-week high.

(Bloomberg) -- BNP Paribas SA raised its 2012 price forecasts for palladium to $835 an ounce and for platinum to $1,770 an ounce.

Mine supply estimates were lowered for this year, with palladium output falling 1 percent, Anne-Laure Tremblay, an analyst at BNP Paribas, said in a report e-mailed today. Platinum will be in surplus this year while palladium is in shortage, she said. Palladium was previously forecast to be $725 an ounce this year and platinum was $1,610, according to the report. 

(Bloomberg) -- Azerbaijan natural gas flow to Turkey halted due to technical failures, according to state-run Anatolia news agency.

There was also a drop in the amount of gas coming from Iran, the news agency said. Breakdowns at compression stations in Azerbaijan and Iran triggered the shortages, Anatolia reported, without saying how it got the information.

Turkish Energy Ministry officials told the news agency that power plants using natural gas switched to diesel and fuel oil to generate electricity. There are no cuts in gas services to residential buildings or industrial plants, ministry officials said, according to Anatolia.

(Bloomberg) -- A policy of nationalizing mines would not be a “smart strategy” for South Africa and changes to taxes or ownership will only be made after extensive consultation with the industry, Trevor Manuel, the country’s planning minister, said.

While a study into nationalization of mines commissioned by the country’s ruling African National Congress has recommended against the policy, it has proposed increased taxes, a party official who has read the document said last week, declining to be identified because it hasn’t been publicly released. Manuel is a member of the ANC’s Economic Policy Committee, which has discussed the study.

“It doesn’t call for nationalization, it calls for new partnerships,” Manuel told the Mining Indaba conference in Cape Town today. “Given the long lead time the industry deserves policy certainty.”

The ANC commissioned the study after calls by it youth wing for nationalization because it said the country’s black majority isn’t benefiting enough from the industry that is the world’s biggest producer of platinum, chrome and manganese. Anglo American Plc, Xstrata Plc, BHP Billiton Ltd. and Rio Tinto Group own assets in the country

“If you want then to take away those property rights you’re going to have to pay for it and if you pay for that you’re not going to be able to pay for health, education or anything else,” Manuel said, adding that the constitution protects property rights. “The country does not have the resources. It clearly is not a smart strategy.”

While elements of the study could concern the mining industry, the proposals will undergo extensive debate before they stand a chance of becoming policy, he said.

“There are proposals in there that would worry many people,” he said. “It’s important not ever to confuse proposals with adopted policy.”

The ANC study will be discussed and may influence policy arguments at party conferences in June and December.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

Silver is trading at $33.35/oz, €25.41/oz and £21.09/oz. 

Platinum is trading at $1,615.25/oz, palladium at $690/oz and rhodium at $1,400/oz. 


Hong Kong gold flow to China more than triples in 2011

Gold snaps two-day slide; Greece eyed

(Economic Times)
HSBC maintains bullish 2012 gold forecast at $1,850 an ounce

Gold falls on dollar strength, lower stocks

Greyerz - Gold Price to Hit $5,000 in 24 Months & Silver $166

(International Business Times)
Fed Reserve Branch Chief Warns of 'Looming Disaster'

Stocks Hmmm — Gold Maybe?

Murray Pollitt's Final Commentary: Money Mountain

John Williams - Unemployment Rate at a Staggering 22.5%

As Falls Sarkozy, So Falls Europe: The Full Story Behind The Upcoming French Election

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engineertheeconomy's picture

Gold is, has been and always will be money. Paper is, has been and always be paper.

Oh regional Indian's picture

Gold never was and never will be money.

Gold represents Wealth in good hands and power in bad ones. 

Silver was always money. I understand both of them are equally fungible etc., but Gold's role in our lives is currently completely mis-understood.

And as I see it now, neither one will be money/wealth or currency in a post SHTF world.

Only your health, state of mind and abilities and what "real" things like food/medicines etc. that you can carry/pull.. 



AUD's picture

Sorry, gold was money, it still is & it always will be. So too silver but it's not as money as gold.

Gold & silver are real things you can carry/pull.

Oh regional Indian's picture

Beg to differ. Silver is more money than gold. Perhaps we are lost in semantics.

Money/Wealth/Store of Value/Currency....... all very different, would'nt you agree?


AUD's picture

No. Money is what extinguishes all debt. If you can extinguish all your debts you are wealthy, to extinguish all your debts, always, you must have a store of value, to extinguish all your debts you utilise currency. All gold & silver, always.

Why do you think Indians are one of the world's premier gold, & probably silver, hoarders?

Ghordius's picture

no. A. unit of accounting, B. currency, C. store of value. the three ideal functions of money

Austrian School is very clear on this, the ideal function is achieved through fungibility

if I can exchange every time 12 silver staters for one golden talent, then they are fungible

Snidley Whipsnae's picture


The Fed has managed to get between a rock and a hard place... with a little help from US pols, treasury, etc.

If the Fed continues to expand their balance sheet (call it QE or whatever) they will cause gold to continue to rise (especially after the paper gold games blow up or real honest exchanges are set up in the East) and cause price hikes in the goods people need daily; ie, food, gas, etc.

With real wages and jobs stagnant or falling the only growth in lending is by Fed printing, loans to students, loans to consumers via credit cards... these consumers are unwilling to bite the bullet and begin saving in real money... PMs... so their will be more bk consumers until the banks reign in credit card use to the truly creditworthy. Think 1955 or so. 

The Fed is unable to create the jobs plus the higher wages that are necessary to stimulate this consumer economy. So, Ben was right when he said 'we have this printing press and we will use it'. But, it has all come to naught.

All the control and the shift of power and decision making to the finance sector has led us to this point... between a rock and a hard place.

On top of these problems is a shift back to an economy that is manufacturing oriented or that plus an export economy. Are Americans ready to compete with Chinese sweat shops for manufacturing jobs? Is the US ready to export non value added natural resources? We will see.

Of course, the Fed has the option of raising interest rates above the real rate of inflation and crashing the economy for a time... This would rid the economy of the zombie banks and businesses and make some credit available for new growth. As Churchill once said "The Americans always do the right thing, after they have tried everything else."

The decisions that the Fed has ahead are going to be far tougher than any they have made so far.



Ghordius's picture

"If the Fed continues to expand..." Here I have a slightly different opinion, it's not IF, it's only WHEN. And this depends NOT from the FED, this depends from the Federal Budget deficit.

I try to point out often that a Central Bank monetizes only when there is something to monetize.

At a certain point, the question is what kind of Nixon Shock will come out of US Politics? I urge you to have a careful look again at the August 15th Nixon speech ( http://www.youtube.com/watch?v=iRzr1QU6K1o ).

Note the 10% import tax at the end and the hint about the price controls that followed...

El Viejo's picture

Thank the Masons for the Whiskey Tax or we would be drinking our money.

engineertheeconomy's picture

Debt is what you have if you borrow someones Gold. If you borrow someones paper, THERE IS  NO FRICKING DEBT. There is only the need to PRINT MORE PAPER AND GIVE IT BACK TO THE SON OF A BITCH. ITS JUST FRICKIN PAPER. Debt is a brainwashing ponzi scam. It's what governments do to screw the sheeple out of their wealth.

Snidley Whipsnae's picture

George Washington raised a larger army to put down the whiskey rebellion on the frontier than the US and Washington raised to win the first war against England.

Of course, Washington had the largest whiskey production stills in the US in continuous operation at Mt Vernon...and, the 'frontier whiskey' was undercutting his price.

Since labor was really labor on the frontier whiskey consumption was enormous by today's standards... Whiskey was THE medication for very sore muscles, joints, injuries, etc... iirc whiskey consumption was a bit over 200 gallons per man per year.

If you could produce more than you consumed it definitely was a store of value... but, making more than 200 gallons of whiskey without a huge amount of sugar is a real chore. The crap that passes for 'moonshine' now is nothing but sugar whiskey and does not compare to the real thing.

'There is nothing new under the sun'   Solomon


Ghordius's picture

ORI, are you getting mystical again? ;-) before the British came, silver was the money base in India, as it was in China

but in ancient Lydia, electrum coins were already minted and circulating some 3000 years ago

what is your position on electrum? a perversion of monetary metals? :-D

Oh regional Indian's picture

:-) Electrum. A naturally ocuring alloy of Gold/Silver and Cu! 

No no Ghordius, I want some of that! 

But in answer to youQ, yes, I feel you can be mystical about money when a) you have too much of it or b) too little there-of! 


Quinvarius's picture

I'd rather have the metals separated at a known purity, personally.  But, I will accept electrum as payment.

_underscore's picture

I can sort of see where you're coming from OrI, vis-a-vis health & ability being more the important attributes in crisis/SHTF situations - but hey, that's true now in our non-SHTF world (discuss..) & always will be, whatever might happen. Back in the near pre-historic (or, in reality, an early version of the SHTF world) people decided they liked the shiny heavy metals & used them for decoration, trade, ceremony, funerary rites etc., or simply just possession/hoarding. No-one to tell them then about the value/desirability of it, they made that up entirely by themselves.. and to continue to.. as we do today. If there is such a thing as 'intrinsic-ness' - then gold & silver have that, just as babies instinctively reach for & love the tit. Should the mooted (or indeed anticipated!) SHTF event occur, I don't foresee too long a period until a means of exchange is sought - guess what I think that means will be? I agree in one sense, gold/silver are entirely arbitrary - we could use sea-shells or jade, or pearls & so on. We don't though & until we do (one could imagine an island bound tribe where no realisable gold/silver existed, so rare sea-shells or carnivore teeth would attain the 'currency' status) the default value/wealth store will be that which has the desired intrinsic property.

Oh regional Indian's picture

It's an evolving position for me _ 

Perhaps the best lesson of all at this time is learning to do with less? 

That way, you always wake up with more than you had yesterday. How is that for a growth scheme?



engineertheeconomy's picture

If you plot the value of Gold through recorded history on a chart you would see a level horizontal  line across the middle of the chart. However, if you plot the value of Gold relative to paper on the same chart, you will see the line plumeting on a curve to the bottom. That's because the value of those pieces of paper goes away at the exact ration of new paper printed to pre-existing paper already in circulation. For those that didn't catch that, if there are 100 Trillion pieces of paper in circulation and you print 100 Trillion more, inflation would be exactly 100%. That would make it appear that Gold doubled in value (to the sheeple) yet those of us that are awake (and have an I.Q. over 50) understand that in actuality what has happened is that the value of those pieces of paper are now only worth 1/2 (one half) of what they were previously worth. To those of us that are awake AND have a higher than average I.Q, we were never fooled into believing that a piece of paper was worth more than a piece of paper in the first place. Paper is a modern invention and has mostly been used to transfer wealth from the working class to the filthy effing rich that never seem to be satisfied. 

engineertheeconomy's picture

If you come to my country and expect me to give you my petroleum for a handful of paper you have to be out of your frickin mind. I will take Gold in exchange for my liquid though. BUT NOT YOUR PAPER GLD THAT IS BACKED BY MORE PAPER.

Dr. Engali's picture

The war mongerers are out in full force on CNBS this morning. It's friggen sickening.

GovtMediaLiars's picture


seeking alpha is also bullish on iran war and supposed resultant profits for exxon, which of course is good for everyone's 401k!!!

Bullish on war!

1) We'll break every damn window in this world

2) ????

3) jobs and wealth for everyone


Krugman et al.

AUD's picture

So why then has the price of gold fallen over the last few months of 2011 yet the quantity of $ has only increased.

Maybe because the quantity theory of money is bullshit?

Value is given by quality. The absence of any quality in central bank credit indicates a credit bubble of unimaginable proportions. That's why everybody denies the bubble exists, it's incomprehensible.

engineertheeconomy's picture

The actual value of Gold has gone consistantly UP. The value of PAPER (GLD) fluctuates because THEY CAN PRINT THE SHIT.

Snidley Whipsnae's picture

Aud... all true. It will continue till the small child in the parade crowd blurts out 'But, The Fed Has No Clothes!'...

When that happens none of us want to be among the mobs headed for the exits.

EL INDIO's picture

Graph 3 is very misleading:

1. Why M2 not M1 ?
2. You can scale and superpose different data plots anyway you want to make your point.

For all the shit the FED has caused, you have to recognise that it has stayed put since the end of QE2, that's why Gold is struggling.

engineertheeconomy's picture

Stayed put? Are you out of yer frickin mind?

RazorForex's picture

Technically gold is due for a retracement. Today the Bernanke speech is probably going to determine deirection. The daily charts are saying we go down for now.


Gold Price Technical Analysis

engineertheeconomy's picture

The ONLY thing that determines the price of PAPER (GLD) is how much PAPER (GLD) they print at any given moment. GOLD does  fluctuate, but ONLY relative to the actual M3. If you believe for a millisecond that the M3 is decreasing then I want some of what ever your smoking.

Al Huxley's picture

Well, I guessSuttmeier knows best... and Roubini... and Gartman... and Nadler... Damn, all these geniuses lookin' out for me, I better sell my gold now before it's too late. Thanks for bringin' this to my attention GoldenGal!

jimmyjames's picture

"We did have a bubble in gold, the bubble popped and we're now trying to reflate," says Richard Suttmeir of valuengine.com in the attached clip.


I have no idea how people see a bubble in gold-i doubt they look any farther than the price rise of the past 10 years-

Until the general public gets involved there will be no bubble and i doubt with all the MSM negativity on gold-that they ever will become involved and also affordability (price) will keep them out-



bushwarcrime's picture

Yeah but what's the M3? besides a nice car.  If the real M3 figure ever got out the dollar would be toast. 

jimmyjames's picture

If the real M3 figure ever got out the dollar would be toast


M3 is not a good measurement for dollar activity and never has been-

It contains MZM and MZM has no measurable money supply value to it-

Here are all your M3 components-


Here's why M3 has been going down and why it was going up-

Money on the move-does not affect the supply-




Snidley Whipsnae's picture

How are you calculating M3? The Fed chose to stop publishing M3 several years ago... because 'M3 is too expensive to continue to calculate and publish'... Yet the Fed can print money for every other reason under the sun.

jimmyjames's picture

How are you calculating M3?


I'm simply looking at all the components that make up M3 (the same components shadow stats used to rebuild it) and when (MMMF's- savings accounts/time deposits etc.) ie (MZM) have an influence on its movements-it cannot be used as a gauge for money supply-

I don't know why the Fed stopped publishing M3-

Maybe because it seems to track recessions and reacts to bear market phenomena-but it's basically useless to track money supply with it-

Herkimer Jerkimer's picture

I'm just a newb to all of this, reading words, phrases and terms that I've got to constantly go and find the definition of to understand. What I do sort of understand, scares the batsnot out of me, here.

What bothers me is the line, (And this is a reflection of the response to the employment numbers out recently, that I've read about here, to no surprise.) what does "seasonally adjusted M1 rose $13.2 billion to $2.233 trillion" mean?

If ya prints da money, how does "seasonality" affect what's actually out there?

How about we get back to real data presented in an objective manner and then present the seasonality adjusted numbers, so we can see the changes/discrepancy? You know, a little transparency?

Why do I think that the amount of M1, without the "seasonally" adjustment, would be much higher?

Like I've said before, "Nobody trusts anybody, anymore."

I put $1000 away as a little kid, at 19.75% in 1980. Volker increased interest rates to slow inflation (10-12%) and claw back the money because they increased the M1 supply by just 12%.

We have now increased the M1 money supply by over 200% since 2007 (800 billion to 2.3 trillion according to Glenn Beck) and there is very little inflation according to the stats and interest rates are nearly zero.


What's going on? Who's lyin' to me?



jimmyjames's picture

Volker increased interest rates to slow inflation (10-12%) and claw back the money because they increased the M1 supply by just 12%.


Actually-that is not true-Volcker increased rates to save the USD-

There was a run on the dollar because of Nixon's default on gold payment obligations to foreign lenders-

Those lenders were forced to accept the dollar when he cut gold loose-

They retaliated by dumping the dollar and buying commodities/gold with dollars and prices went to the moon because of dollar weakness-

When Volcker raised rates to 20+% it stopped the dollar dumping-money came back out of commodities and back into US paper because of those wild returns-

As money flowed out of commodities-prices fell and the dollar strengthened-

There was a danger of hyper-inflation back then-because there was no world debt bubble to unwind-like there is now-

leon66's picture

my neighbor's sister-in-law makes $80 an hour on the computer. She has been without work for 10 months but last month her paycheck was $8632 just working on the computer for a few hours. Go to this web site and read more...  http://lazycash9.com

Herkimer Jerkimer's picture

Wow! To think I've been reading ZeroHedge as a newbie in the finance world, to try and figure out just what the hell is going on, and here is the key right here, for all to see! I can sit at my computer and make $80 an hour?!? Who knew?

I'm all over this like a fat kid on a smartie! And I'm the first guy in, too!

I tried that envelope stuffing career for years and it just never worked out! This sounds like a sure thing!

Thanks pal!



Herkimer Jerkimer's picture

Wow! To think I've been reading ZeroHedge as a newbie in the finance world, to try and figure out just what the hell is going on, and here is the key right here, for all to see! I can sit at my computer and make $80 an hour?!? Who knew?

I'm all over this like a fat kid on a smartie! And I'm the first guy in, too!

I tried that envelope stuffing career for years and it just never worked out! This sounds like a sure thing!

Thanks pal!



Watauga's picture



Gold--first half of 2012--will hit $1400; Silver--first half of 2012--will hit $23


Gold--by 2013--will hit $2000; Silver--by 2013--will hit $40.

THEN, while still experiencing ups and downs day-to-day, Gold will hit $5000+ and Silver $150+ by the end of 2015.

The Euro is dead and the dollar is on artificial life support.  Once this is understood, and once a final stage of manipulation in the Big Ponzi is realized to be a final step, the dollar will die and the PMs will go parabolic.


oddjob's picture

Watauga, this is far from the statist drivel you have spouted in the past.

Watauga's picture


While you may have misconstrued something I wrote in the past as Statist, or I may have been less articulate than I should have been in one post or another, rest assured that I am as far from being a Statist as anyone on the face of the planet.  I have been fighting against Leviathan since first reading I'll Take My Stand in 1988, and have never read anything since that would dissuade me from fighting against Statism.

Now, if you know me from my youthful ignorance and academic indiscretions from the late 70s, when I got caught up in some laughably stupid concepts, that is another story--a sad and terrible one that it pains me to remember.  But don't most of us have our youthful mistakes, toying with the Statist concepts of Marx, and Lenin, and Daniel Webster, and Lincoln, and Woodrow Wilson, and FDR, and LBJ. . . ?   Were we not all fools once? 

No, Statism is pure Evil, and it is WINNING in the United States today--in a big way--and it will win again in 2012.  It will be interesting (a curse, I know) to witness how America responds to a 2nd term, especially if he regains a majority in the House.  Wow.  Goodbye 1st A, 2nd A, 4th A, 5th A, 10th A. . .  goodbye liberty. . .  goodbye private property. . .  goodbye free enterprise. . .   hello Totalitarianism!


oddjob's picture

Must have been misread on my part. I was learning to count in the 70's so i probably never met you. Continue to fight on!....green for you.

Quinvarius's picture

I think $2000/$45 by June.  Too many of the Dollar end game triggers are being pulled.  Global Treasury selling.  Massive printing.  Another war.  More debt ceiling raises every few months.  The banks are still broken and finding ways to create more an more money all the time.  The CME is losing control of pricing because people are afraid to ask it for delivery and would rather go straight to miners.  The very bad shit predicted by anyone with half an interest in math is happening.

cranky-old-geezer's picture



America's history clearly shows gold and silver were viewed as money until 1971.

  • The Constitution declares gold and silver are the only legal tender for payment of debts in America:
  • "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."

  • The word "dollar" originally was a unit of measurement.  A dollar's worth of gold.  A dollar's worth of silver.
  • The government codified into law what a dollar of gold was and a dollar of silver.
  • The only stable paper currency in America's history was gold and silver certificates.  They were redeemable for gold and silver coin at any national bank.
  • Every non-redeemable paper currency in America's history has been a failure.  They eventually became worthless.
  • When other nations became concerned about FRNs declining value, they wanted payment in gold. 
  • When the Treasury ran out of gold to pay other nations, Nixon "closed the gold window", eliminating any FRN redeemability in gold. 
  • Immediately after that FRNs started losing value rapidly, causing massive inflation in the 70s, forcing the Fed to raise interest rates to 20% to stop it.
  • Just like past non-redeemable currencies, our present day FRNs have lost 98% of their original value and will become worthless eventually.
  • Today our government uses military force to keep other nations using FRNs and maintaining its world reserve currency status. 
  • If that military force were to stop, other nations would stop using FRNs and they would quickly lose their WRC status.

You can make all the academic arguments you want for or against gold being money.

But these are the facts from America's history.  Gold and silver were viewed as money until 1971.  The only stable paper currency America ever had was gold and silver certificates.

But they weren't money.  They were claim checks for money.  Gold and silver were the actual money.  Everybody understood that.

There was no question what a gold or silver certificate was worth. It was redeemable for a specific amount of gold or silver.

Today it's impossible to tell what an FRN is worth.  Because it's not redeemable for anything.

Ben Bernanke is fully aware of these facts.  Here's what he said in 2002:

Like gold, U.S. dollars have value only to the extent they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or today, it’s electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is the equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.”

-- Ben Bernanke, Nov 21, 2002

So yes, Ben Bernanke is fully aware printing more FRNs and releasing them into the money supply dilutes the value of each FRN, silently stealing wealth from you, from me, from everybody using FRNs.