Dollar geyser is ebbing, though doubled in nine years

Many financial analysts wonder whether Fed Reserve will raise interest rates, but the actual increase or decrease in dollars may be more important. The chart below shows that Fed Reserve has slowed the issuing of new dollars for the past three years. For the 12 months ending June 2015, Fed Reserve issued 7.5 percent more dollars, whereas the 2014 increase was 8.3 percent, and the 2013 increase was 10.5%. Since the 7.5 percent increase is a smaller increase than past years, any increase in economic activity is likely to be less than past years.

Annual Changes Federal Reserve Dollars

A recession can happen even if Fed Reserve issues more dollars. Though if the pace slows, then less economic activity might happen versus past years, and some businesses or business projects may fail if the business managers expect the higher growth of past years.

The total quantity of dollars has doubled during the past seven years. This was two years faster than the prior doubling. This might be due to the size of the bank and business mistakes that helped cause the recent great recession. Bigger mistakes require bigger infusions of new dollars. Of course, Fed Reserve could have let those businesses fail since they made mistakes, but it’s a rigged market and the politically and financially connected often come out on top.

Fed Reserve Digit Quantity thru 2015-06

 

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