The Federal Reserve’s balance sheet is now at $6.367 trillion.  The previous week it was at $6.083 trillion.  This is an increase of approximately  $284 billion in one week.  For a couple of weeks in March, it was going up over $500 billion per week.

This is what is being added every single week.  The total balance sheet was around $900 billion in 2008 before the worst of the financial crisis hit.

The Fed doubled its balance sheet in late 2008 in the matter of a couple of months.  It then took over 5 years to double it again, which in itself is crazy.

Now it looks like the Fed could double its balance sheet again in the matter of a couple of months.  But instead of starting at under $1 trillion, it was starting around $4 trillion.

I don’t know where this ends.  Maybe it will be at $10 trillion by the end of the year.

This is going to have severe consequences that are far greater than businesses being shut down for a couple of months.  We are going to see a dramatic decrease in living standards.  Real wages will decline significantly.

On the one hand, people will be fearful and cut back consumption.  But then we have the Fed creating massive amounts of money, almost daring people to defy it by holding back consumption.

The Fed is seemingly trying to create significant price inflation, and I am afraid we will get it good and hard one of these days.  The positive side is that it might finally force the Fed to scale back, and government along with it.

This is going to hit government at every level.  The Fed is going to buy municipal bonds to help bail out state and local governments, but it can only do so much.  The state and local governments cannot create money on their own.  With a major decline in tax collections, they will eventually be forced to scale back dramatically.

This whole thing is going to be extremely painful.  You should prepare yourself accordingly.  I think your number one concern should be protecting your main source (or sources) of income as best as you can.  Your second concern should be protecting against massive price inflation.

Let’s hope that we can get through this and government at all levels will be forced to scale back drastically.  Maybe we can one day look forward to much greater liberty when the welfare state loses legitimacy.