The money supply has been increased by an enormous amount over the last few years.
Of course this is just the tail end of the dollar extinction.
The Fed either didn’t understand that such a huge money supply increase would lead to very high inflation for a sustained period, or they were acting for political purposes, or some combination of both.
They are handcuffed. The Greenspan Put is still very much the MO of the central bankers. They are being held hostage by the gambling halls of Wall Street.
Powell surfs atop a Bernanke-Yellen crest and is too weak. He buckled to both Trump and Biden as Arthur Burns buckled to Nixon. There is no Volcker on the horizon, only Arthur Burns aplenty. Biden will not displace Powell with a hawk.
The debt interest payments are the other elephant in the room.
Rates are going higher whether the Fed acts or not. Will they destroy the dollar? I think they will. The US govt was wrecked by first Reagan, then Clinton, Bush 2, Obama, and Trump. The political elites of the US are in over their head.
I won’t comment one way or another about the solvency of the Fed, leaving that up to Dopers who will undoubtedly do a better job, but as a data analyst I can’t look at your graphs without experiencing significant pain. Not with what they say but with how they are presented.
Absolute values of change are not nearly as meaningful as relative values. As an example just because the Dow Jones dropped over 2,9997 points on March 16, 2020 doesn’t mean that it was 6 times worse than Black Monday in 1929 when it only dropped 508 points.
These sorts of long term growth graphs should always be viewed on a log scale.
With that in mind I would recommend the following plots instead.
There is still a big jump in the M1 but its not outlandish, while the M2 is more or less linear.
