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Source link: http://archive.mises.org/9474/beck-on-money-supply-expansion/

Beck on Money Supply Expansion

February 19, 2009 by


JL February 19, 2009 at 3:56 pm

coming from him, I feel like inflation won’t be nearly as bad as people claim. that’s just a knee jerk reaction though. plus bernanke assures us that he’ll reverse it before inflation becomes a problem. is that possible? what could he do?

rbk February 19, 2009 at 4:17 pm

I find it nearly impossible to listen to Beck for more than 10 seconds. I might agree with him on some things but I’ll never know.

rbk February 19, 2009 at 4:18 pm

I find it nearly impossible to listen to Beck for more than 10 seconds. I might agree with him on some things but I’ll never know.

ehmoran February 19, 2009 at 4:34 pm

I was just watching his explanation of Banking and Money distribution. Not bad, but, either he still doesn’t truly understand the underlying operation, missed it, or didn’t include the WHOLE story for some unknown reason.

AJ Witoslawski February 19, 2009 at 5:04 pm

Glenn Beck isn’t that bad. Let me tell you, during democratic rule, listening/watching Glenn Beck, Sean Hannity, Rush Limbaugh, and Mark Levin make me a happy man. They’re all war mongerers and all except Levin are drug hawks, but they do a good job of attacking Obama and Pelosi on fiscal (and sometimes monetary) policy.

edp February 19, 2009 at 5:06 pm

Beck has been getting better and better. I think he’s getting more and more exposure to Austrian and Libertarian literature. He’s still off on some things, but I think he’s got a good intuition for what makes sense; he’s certainly one of the best mainstream sources.

Have you seen the Monetary Base though? It took a huge plunge over the past two weeks. Went from 1750 to 1551. Perhaps Bernanke is starting to getting uneasy about its consequences.

The MZM jumped up a decent amount and the PPI was way higher than what many expected.

jason4liberty February 19, 2009 at 5:12 pm

Or perhaps they have decided that the truth is threatening their power, and have started to lie in earnest.

Jay D February 19, 2009 at 5:31 pm

He doesn’t explain that the chart is M0 or M1 or whatever it is. That is a good volcano graphic though.

Robert Brager February 19, 2009 at 5:36 pm

I have a prediction: Glenn Beck will go full-on Austrian libertarian before the close of the decade. I’ve been listening to his radio programme for some time now. He used to drive me nuts. About a year and a half ago he started freaking out about the horrid state of the economy. Back then, he was still pretty bad on the economic reasoning and behind the global empire and very pro-military (consequently).

In the time that has passed I’ve come to the conclusion that he’s that rare public figure, at least in his field, who challenges his own beliefs and he’s been reading like mad. A few months ago he began citing passages from Hayek (which irritated me at the time, because I thought he was cherrypicking in the time-tested faux-free market mode that mainstream conservatives mastered decades ago) and announced he had recently read “The Road to Serfdom” (oh, yeah, said I, so had Maggie Thatcher and Ronnie Reagan) and had been tracking down still more Hayek. Hopefully, I thought then, he’ll learn something.

And he has. The other day he explicitly called the American foreign policy “imperial” and made clear that he didn’t want war with Russia or Iran or Pakistan and that we ought to withdraw from our imperial policy. The world doesn’t appreciate its world policeman, understandably, and that it was unsustainable and that it will end in bankruptcy. That was pretty significant to me because just last June he was justifying war for oil and superfluous garrison posting to defend that oil supply. Glenn Beck going anti-imperial and anti-war and bringing up Hayek and Mises at regular intervals of late? Hawking Tom Woods and his new book like mad? I would’ve thought that impossible last year.

He has been pretty forthcoming about having placed his radio show and his newest television show, not to mention his wallet, in jeopardy adopting this verboten position. I applaud the guy. I think he’s genuine here. He’s still not all of the way there yet, but I think he’s getting there and his economic reasoning still requires some adjusting. The evolution of Glenn Beck is good news and I hope that the train doesn’t derail. I’m for sending him more books.

jorge besada February 19, 2009 at 5:48 pm


When all is said and done and this intellectual revolution hopefully saves us, I believe that a simple understanding of the quantity theory of money will have proven itself to be the key idea that managed to transform and motivate so many minds. It is so easy to understand and teach and totally destroys the FED’s inflation fighter lies and so much more.

Just like money arose without people’s intention a la Mengerian/Hayekian selection, the same perhaps might be said about this “teach inflation” meme.


rbk February 19, 2009 at 6:57 pm

You guys might be right on the substance and Beck’s supposed desire to learn but….it’s his frenetic, hyper-spastic style that irritates the hell out of me. It gets old. Fast.

ehmoran February 19, 2009 at 7:33 pm


But don’t you feel the same way he does? I admit it, I feel like he does but I can’t voice my FRUSTRATIONS like he can, I’m jealous. When he was on CNN, I did email him to say “calm down, you’re no better than the rest of the frenzied media”. Well, he did mellow out a little.

But he doesn’t seem to be listening anymore to other things.

Maybe he’s trying to get us really exited so we’ll DO something. Its pretty bad out here. We very much are going Socialist. Regardless, no matter what these guys say, its just getting worse. I see lots and lots of angry PEASANTS out there but they’re not changing things either, they’re just getting more pissed off.

And now, anyone not BLACK is a “RACIST”. Whats up with that???

I’m wondering when us rational people are going to lose it and start standing up. I wonder when the nearly 50 million REDNECKS will all come out of the woods as a MOB. The Leaders of this planet are creating Chaos and infuriating the regular FOLKS.

Robert Brager February 19, 2009 at 8:03 pm

Interestingly, RBK, Beck doesn’t… seem… to get that spastic over the radio airwaves. That’s a peculiarity that strikes me as largely confined to his television show. I dunno. In actuality, I agree with you to the extent that the hyperactivity detracts a bit from his presentation.

Ohhh Henry February 19, 2009 at 8:42 pm

“This has never, ever been done by anybody ever before.”

Correct me if I’m wrong, but I think that “this” is exactly what was done to *every* unbacked paper currency in history.

RickC February 19, 2009 at 9:13 pm

Ohhh Henry,

I think it’s called exaggerating for effect. Come on, it’s television and it’s got to have a little entertainment. I never watched Beck until recently but I’ve found his head nod to libertarian thought refreshing considering what else is out there. I mean you can count on one hand, with fingers left over, the people with even vaguely libertarian views on the boob tube.

As to the “never, ever” statement, I assumed he was talking about U.S. history since his graph referred only to the Fed’s printing operations since its inception.

Travis February 19, 2009 at 9:30 pm

That money is not causing hyperinflation. Credit is now worthless and the increase in base money is an attempt to shield larger banks from becoming legally insolvent. There will be many more small bank failures and the credit bubble will continue to shrink. Why would the banks loan that money when so many loans are in default or close to it? They are not, they will hold it until this web of debt is under control. Grab onto those dollars mates cuz everyone still wants them.

Nexus February 19, 2009 at 11:18 pm

I find it impossible to believe the money supply can be expanded this much and national debt increased over $1 trillion a year for years to come without inflationary consequences. Something has got to give.

Steve Liesman February 19, 2009 at 11:39 pm

I would take a look at Mike Shedlock’s article over at Minyanville. “Modeling our Fiat World”.

He makes the case that as fast as the Fed is creating those new dollars, the financial institutions have and continue to de-leverage so much that the monetary definition of inflation makes little sense right now.

“In other words, the mark-to-market value of credit is contracting faster than base money is rising. ”

While there are obvious differences in the way Austrians and the mainstream define inflation, if we use the prevalent view of higher prices it will be interesting in the coming weeks to see if higher or lower prices win out.

Personally I think the long term play remains to be long gold and short treasuries, but its always good to read both sides of the argument. While the long-run implications of the currency devaluations seems like a no-brainer, the short run isn’t, as evidenced by the incredible strength of the dollar so far this year. Strength that has caught many of the hard money crowd more than a little off guard.

In hindsight it makes sense, but even guys like Peter Shiff that have called the downturn in the economy have gotten it badly wrong early on with regard to the USD/emerging markets out performance, etc, etc.

Anyway, enjoy the article. :)

ehmoran February 19, 2009 at 11:40 pm

But wouldn’t US inflation be relative to the inflation rates in other countries? And wouldn’t it depend on the inflation rates in trading partner countries? Just an additive effect, RIGHT?

SO US inflation could be 2% using enough MATH regardless of the money quantity in circulation.

That might be how they’ve been able to report such low US inflation rates since the late 1980′s?

Lester Hunt February 20, 2009 at 12:38 am

I had been wondering what is going on with Beck, and I found Robert Brager’s comment, above, very convincing – and encouraging. Maybe Beck is learning and growing. It happens!

Enjoy Every Sandwich February 20, 2009 at 7:15 am

It’s unlikely that I will ever be able to trust Beck and his ilk on their newfound love of libertarianism. I recall that during the Clinton regime a lot of righties claimed to believe in such things. It all changed when they got into power.

Enjoy Every Sandwich February 20, 2009 at 7:21 am

I also recall that when the right got back into power and their blatant hypocrisy was out there for everybody to see, it tainted libertarians because many people had heard of libertarianism through these “mainstream” righties. Just about every day I run into somebody who thinks a libertarian is just a particularly hardcore Republican who talks about small government but shovels out billions to Halliburton.

J Cortez February 20, 2009 at 10:08 am

I dislike Beck, but find his current talk about the Fed to be a very good thing. I agree he’s coming off a little badly due to his presentation, but where else can you see something like this on a major national media outlet?

I disagree that Beck will become austro-libertarian, I think his past record is too bad for that. Of course, I hope I am completely wrong. I would welcome him as just as I would welcome someone like Rachel Maddow, whom I also dislike. More people becoming austro-libertarians, whether they be anarcho-capitalist or classical liberal is what is needed, whatever their record, whatever their past.

Robbie February 20, 2009 at 10:21 am

Enjoy Every Sandwich: “It’s unlikely that I will ever be able to trust Beck and his ilk on their newfound love of libertarianism. I recall that during the Clinton regime a lot of righties claimed to believe in such things. It all changed when they got into power.”

Glenn Beck isn’t running for office.

E February 20, 2009 at 11:36 am

Those of you attacking recent or new converts like Beck, stop it! That’s not helping anything. How is saying things like “I’ll never trust so and so.” open minded? Things change, especially people and their viewpoints. I’m a recent convert myself and let me say, quite a lot is possible once you’re given the information properly explaining alternative viewpoints.

Clearly this recent crisis and having Ron Paul, Peter Schiff, (maybe Steve Moore) on his old show has exposed Beck and alot of other people to Austrian views for the first time. Don’t be annoyed with people who were kept in the dark by a biased ignornant media– it’s time to unite and form a mainstream movement for real change. Many people love big government and Keynesianism, and will NEVER change their views, so we can’t obsess about the past.

It’s been complained about for awhile that the media wasn’t giving time to alternative views, now that some shows are (new show Freedom Watch also is), don’t attack the new converts! How logical would that be?

ehmoran February 20, 2009 at 11:53 am


VERY, VERY, well said. I hope all respect, take to heart, and strongly consider was you’ve said.

More people need to have the courage to STAND-UP for others that try improve their’s and others’ lives through learning and stand-up against those that want to take away and diminish the things others have worked extremely hard to obtain while maintaining a respect for the rights of others.

In others words, sincere and good people need to be highlighted and revered more than, say, celebrating less Socially Desirable individuals like building a MAFIA Museum in Las Vegas.

How can others condemn someone’s desire to learn and teach others and focus their entire objections only on the negative by pointing out a slight misunderstandings. VERY, VERY, counter-productive for the EVOLUTION of Society.


Enjoy Every Sandwich February 20, 2009 at 11:57 am

@Robbie: yes, I am aware that Beck is not currently running for office. But he is a cheerleader for many who do. As long as the Democrats are in power, both the Republicans and their cheerleaders will speak of limiting the power of government. They will drop the idea like a hot rock when Republicans get back into power.

@E: I’m not “attacking” anybody. This is just a history lesson: whenever libertarians have attempted to ride the coattails of one of the “major” parties, we have always been promptly ejected once said party decides that they don’t need us anymore. Have we already forgotten the ’90s? Now, if Beck really means it this time that’s great. But I’ll have to see it; I won’t take it on faith. It’s just a basic fact of life: if you destroy trust, you don’t just get it back, you have to rebuild it.

And whatever you do, don’t compromise your principles for the sake of your grand alliance. You’ll regret it, believe me.

Jonathan Richter February 20, 2009 at 11:58 am

I just watched a Beck video from 2/19/2009 on the foxnews website “Look Behind the Curtain”. He calls out the Fed at the end. Check it out.

Robbie February 20, 2009 at 3:22 pm

You must be listening to a different Glenn Beck than the one I listen to Enjoy Every Sandwich. I think skepticism is healthy, but you are practicing cynicism, which is not.

ehmoran February 20, 2009 at 4:02 pm

On FOX right now,

Beck performs a perfect REALITY Check.


Robert Brager February 20, 2009 at 5:39 pm

Like I say, I’m for sending him more books. We could get a fund going…

Lee February 21, 2009 at 11:12 am

Oh boy… I love that video. I’m so buying gold on Monday. You guys can say whatever you want, but I’m going back to the barter system.

Anyone want to trade chickens for corn?

heuristic February 21, 2009 at 11:27 am

I read the comments and I think: So much reading of the entrails of chickens, reading of tea leaves. As I’ve said elsewhere, it is just entertainment. The point is to keep your eyeballs glued to the screen until the next commercial break.

ehmoran February 21, 2009 at 1:09 pm


Many are reverting back to the barter system.

Are you buying gold bullion or stocks, like the ETF GLD. If so, watch IT!!!.

It seems the Gov’t is now selling Gold at, I believe, $700.00 an ounce. Well, gold hit over $1000.00 an ounce yesterday. I’ve never seen the Gov’t sell gold like this. Something is UP!!!! and I am very suspicious of this. Regardless of what others say, the Gov’t needs that gold to pay its debt and now they are depleting that source.

Just a sincere recommendation, If you’re buying gold because you’re afraid of, say, Armageddon, and, again, this is just my sincere advise, buy a year or two supplies, like food, clothes, etc., that you think you’ll need. Learn how to store these supplies.

One very, very important thought, GET OUT OF DEBT as FAST as you can after you’ve built your supply.

Lee February 21, 2009 at 2:00 pm


The jig is up for the Fed. I’ve been watching commodity prices for a while. I’m just frustrated I didn’t have the cash to buy gold and silver around Nov. 20th 2008 when The Dow Jones Industrial average was about where it is today. The sudden plunge of the market caused gold and silver to hit ~$700 and ~$10 an ounce respectively.

Now, the DJI is worse than it was before, but gold and silver are at ~$1000 and ~$14.5 per ounce. This discrepancy definitely does not appear to be caused by an increase in industrial demand. (It’s probably a mix of panic, and the speculation that the dollar will substantially weaken)

So, now I’m left with two options. 1) Keep my money at the bank and watch its value depreciate or 2) Withdraw all of my money, convert it to gold/silver, and store it in a safety deposit box. Gold/Silver seems to be the better option.

In the event I’m wrong, the ensuing inflation will help me break even. In the event that I’m right, I reap a substantial profit from the windfall.

And while buying supplies might seem like a good idea, I don’t believe we’ll see an apocalypse. I imagine I’ll be able to buy a can of beans with the same amount of silver/gold in the future as I can today.

So ultimately, the question is, “Do I want to buy supplies now? or in the future?” But you see, if I’m wrong about all of this, and I bought supplies instead of gold/silver… well, it’d be much harder to find a person who wants to buy a 2 year supply of beans, and rice.

Gil February 21, 2009 at 8:15 pm

Well, ehmoran, lee, if anyone believes George Soros the system has already gone ‘beyond the point of no return’.


Who knows soon what may be harder to find that someone willing to buy beans&rice is someone who is willling to sell beans&rice.

ehmoran February 21, 2009 at 8:36 pm


It all depends on your willingnous to count on a robust recovering economy. IF we go into a full blown depression, it won’t be like 1933, this will be a 21st century catastrophe.

If inflation jumps, which it will have to, buying supplies at these prices maybe a very good investment. At least you won’t need to buy food at much higher prices later, and you might beat the LINES at the counter.

Remember the Rice Shortage this year, I’m wondering if that wasn’t a TRIAL RUN and that seems to be staged.

But you’ve got to ask yourself: Why is the U.S. Government selling GOLD????? while locking down GOLD and SILVER mines in the U.S.????? (my best friend is a gold miner).

ehmoran February 21, 2009 at 8:49 pm

Ladies and Gentlemen,

I hate to do this and I’m not preaching and trying to convert anyone. Likely the type of statements listed below come from people that actually care and have compassion for others welfare.

And, to make the below more acceptable, all references COULD be removed and readers could be told that Nostradamus, Plato, heck, a Hope Medicine Man or an Online or Phone Astrologist said it, but that would be plagiarism, completely wrong, and UNFAIR. That’s why we need to be open minded and communicate with each other.


Ezekiel 33
Ezekiel a Watchman
1 The word of the LORD came to me: 2 “Son of man, speak to your countrymen and say to them: ‘When I bring the sword against a land, and the people of the land choose one of their men and make him their watchman, 3 and he sees the sword coming against the land and blows the trumpet to warn the people, 4 then if anyone hears the trumpet but does not take warning and the sword comes and takes his life, his blood will be on his own head. 5 Since he heard the sound of the trumpet but did not take warning, his blood will be on his own head. If he had taken warning, he would have saved himself. 6 But if the watchman sees the sword coming and does not blow the trumpet to warn the people and the sword comes and takes the life of one of them, that man will be taken away because of his sin, but I will hold the watchman accountable for his blood.’

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