Unlike the other familiar hockey stick, this one is not projected into the future, this one is 100% in the past.
That big jump at the right is this past week. It means US currency in circulation just doubled.
These days, to do this nifty little trick, they don’t even have to ask the Bureau of Engraving to work overtime. The money supply can double with just a few mouse clicks – it’s all done electronically now.
For Geithner, this is like chumming shark-infested waters right before he jumps in to swim. With the performance we’ve seen so far, do we really trust him to safely navigate troubled waters to keep inflation under control and dollar investors happy? I doubt it. Not after lying at least twice to Congress in one week, and then postponing the unveiling of his super-recovery plan for the second time.
Think global investors are going to trust what he says? I don’t think so either.
Will the price of bread double tomorrow? No.
Will it scare the guys managing your 401k? Yes.
And you can bet that China and other countries with large positions in the dollar are going to be very, very pissed. Um. Like folks we really don’t want to piss off right now, you know?