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Image Set II: Chapters 3 and 4


Chapter 3


Figure 3.1 Decrease in Home Values When Mortgage Rates Increase: Chart assumes current mortgage rate is 4 percent.  An increase to 5 percent would force home price down 11 percent to maintain the same monthly payment.  


Source: The Foresight Group




Figure 3.2 Increase in the Monetary Base 1984 - 2010: Our money supply has increased massively with the Fed’s recent money printing operations—the fuel for the fires of inflation.  


Source: St. Louis Federal Reserve




Figure 3.3 Amount of Excess Reserves Held by Banks 1950 - 2010:  For the past 60 years banks have held no excess reserves, but in the last two years excess reserves have soared to over $1 trillion.


Source: Federal Reserve




Chapter 4




Copyright © 2006 Lee Lorenz from All rights reserved.




Figure 4.1 Ratio of US Government Debt to Tax Revenues 2011: Our Debt to income ratio is 7 to 1 and heading towards an incredible 8 to1.  Is that a good debt?


Source: Office of Management and Budget




Figure 4.2 Recent Rise in Annual Government Deficit: Our annual government deficit is exploding, which is shining a very bright spotlight on our already enormous government debt (our accumulated annual deficits). 



Source: Federal Reserve.




Figure 4.3 The Recent Rapid Rise in the Money Supply: The Fed has massively increased the money supply paving the way for much higher inflation.


Source: Federal Reserve




Figure 4.4 Federal Government Debt Maturity Distribution:  US government debt is very short term forcing frequent re-financing which makes it effectively adjustable rate debt. 


Source: US Treasury




Figure 4.5 Interest Costs of US Government Debt: Even small increases in interest rates can dramatically increase the interest costs on such a massive government debt. 


Source: The Foresight Group

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