Something strange is happening at the Fed; just look at this chart.
The last time the Fed went nuts with monetary expansion, it did it in the wake of the Lehman collapse, on behalf, and likely at the behest, of the failing financial sector. The mood at the time was, "Consequences be damned, we've got to save Wall Street!" No doubt, many truly believed that their world was ending.
Now, however, the Fed has been pumping like mad for three months, even though, by all indicators, the media and financial industry seems to believe that all is hunky-dory.
This is a chart of the US monetary base. In simple terms, it charts how much money the Fed has pumped into the system (at least that it admits). So it’s a kind of visual of the Fed hitting the PANIC button: when the monetary base explodes higher, the Fed is FREAKING out.
You'll note that during the Financial Crisis the Fed didn't do much until the autumn of 2008 when it pumped nearly $1 trillion into the system. Think about that, the Fed didn't go nuts pumping money until the stuff REALLY hit the fan.
You'll also note that there's only one other time when the monetary base went absolutely vertical: TODAY.
Indeed, the Fed has pumped nearly $500 billion into the system since the start of 2011. Don't even try to tell me this is QE 2. If it was then the monetary base should have spiked in late 2010, NOT in 2011.
No, this is the Fed FREAKING OUT about the financial system again. And it's a freak out on par with 2008.