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
[c04g001]
Copyright © 2006 Lee Lorenz from cartoonbank.com. 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.
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.
[c04f004]
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.
Copyright © 2020 Aftershock Publishing, LLC