The Fed's hockey stick chart.(Inside Track)(analysis of the money supply)

On his January 29 TV show, Glenn Beck drew national attention to a relatively obscure graph of our nation's "monetary base" (a narrow definition of money supply, also known as M0), maintained online by the Research Department of the St. Louis Federal Reserve. The reason for the special attention was the dramatic hockey stick shape of the graph that developed during the last few months of 2008. Beginning about September, the usually stable graph of monetary base vs. years shot virtually straight up for the remainder of the year.

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Shown here is the graph that Beck featured on his January 29 show. It was blown up into a huge graph on the set. Beck provided a walking tour of the graph, complete with historical highlights ranging from the stock market crash in 1929 to the huge federal bailouts that began in late 2008. When Beck reached the end of the graph (December 2008), the endpoint burst into flames to help make his point that something extraordinarily bad was happening with our money supply. His comment was: "We have pumped all this money in and devalued our money. How is it not going to be worthless?"

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