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"Central bankers... they often don't know where they are, let alone where they are heading; their maps and compasses are unreliable and their steering is wonky. Worst of all their recent policy dilemmas are the equivalent of not knowing whether the earth is round or flat."
The Economist
September 28th 2002

Monetary Base

Monetary Base
The Monetary base (definition):
The currency and central bank deposits that together provide the base for the money supply under fractional reserve banking. Also defined as the central bank assets the acquisition of which creates this monetary base by injecting domestic money into the economy. The latter definition usually includes international reserves and domestic credit. By either definition, the monetary base changes as a result of open market operations and exchange market intervention. The data is biweekly.

So we had a simple prediction, completely borne out by experience. And you can therefore understand why I want to bang my head against the wall when economists say things along the lines of “the Fed can just target the money supply” or “we would have had runaway inflation except that for some reason banks just increased excess reserves — who could have predicted?”