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 entering 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.
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?