the above link contains information (which i havent been able to confirm if true) about a false credit cunch in 2008.
the article has a chart that displays something called “total bank credit of all commercial banks”.
http://research.stlouisfed.org/fred2/series/TOTBKCR
this link has a more current chart of the TOTBKCR.
if the information on the chart is legitmate - is this a good guage to actually see how the Federal Reserve inflates the credit-money supply?
the chart at the st louis federal reserve page seems to show nearly uninterrupted growth of commercial bank credit since 1970.
is much of the commercial bank credit ‘fed’ from the 'federal reserve’s (what i have been told) open market operations and federal funds rate manipulations?
for instance, the following excerpt was from a poster at mises.org/community
"then the way they get the interest rate down is buy boosting supply of the funds that can be loaned. This is achieved indirectly by purchasing assets in the open market (via the OMOs). The result will be that more money will find it’s way into the coffers of the commercial banks that hold balances with the Fed. To the extent that those commercial banks are not able to extend loans on the basis of this money themselves, they will (ordinarily) lend it to other commercial banks and the greater the quantity of funds there is to be loand the lower the interest rates that these will be able to attract.
S_o the inflation is two-fold. Firstly, the Fed pushes new reserves into the system via the OMOs in order to try to bring the FFR down. Secondly the commercial banks pyramid loans on the basis of those reserves. So normally if the Fed increases the monetary base (not typically notes and coins but more commonly by increasing the total quantity of reserves in the system held on account with the Fed itself) by 100 billion you might expect an actual expansion of the overall money supply of maybe 1 trillion…"_
_**the actual procedure of creating money (alt thread)
is the above described process true? and is the TOTBKCR (true) a good way to track the funds from the federal reserve OMO’s as they are (and when) lent by commercial banks??
also, does the creation of credit-money continually exceed the retirement or settlement of loans?
clarification appreciated