"...This is a chart of Federal Reserve credit, which is used to...

"...This is a chart of Federal Reserve credit, which is used to create the monetary base, which in turn feeds into the money supply proper.

In the past 2 months, the Federal Reserve has increased its credit by 131%. That is, the U.S. money supply is going to double in a very short period of time.

Just to put this number in context, the worst year for money creation since WWII was 1986 when the money supply increased by 17%.

I don’t know how long the above insanity will go on, but clearly the Fed is going to blow the 1986 figure out of the water. There was no crisis when this started, but our Government, to fix the “crisis,” is destroying our economy.

The sad fact is that both Democrats and Republicans are fully committed to printing money. After all, the Republican slogan since Reagan has been, “Let us have a tax cut like John F. Kennedy,” meaning a tax cut without a spending cut. Such tax cuts are financed, not by borrowing from the people, but by printing money out of nothing.

So the important thing for you as a gold bug to understand is that this is not a “deflationary” crisis. There is no decrease in the money supply, and the general public has never just stopped spending on its own without such a decrease...."

Full article at http://www.kitco.com/ind/katz/nov102008.html