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Monetary Watch January 2011: Money supply firing on all cylinders?

By Implode-Explode Heavy Industries

``... for the first time in some time the money supply is starting to fire on all cylinders. The Federal Reserve?s QE II asset purchase program which began in November means $600 billion in covered money substitutes ? a net $75 billion per month through at least June 2011 ? and, holding all other things constant, the same in bank reserves. Private banks who are already sitting on $1 trillion in reserves owing to the Federal Reserves QE I asset purchase program are now levering up, creating uncovered money substitutes at double digit rates. That?s what we would call a money supply that is starting to fire on all cylinders.''

Full post as published by Mortgage Lender Implode-o-Meter on January 21, 2011 (boomark / email).