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The chart below comes from the Federal Reserve Bank of St. Louis and shows the current Money Multiplier. Basically, the Money Multiplier shows the maximum amount of credit that can be created by commercial banks while maintaining adequate reserves. From the looks of this chart, it’s obvious that the credit markets aren’t improving and that the Fed’s power to stimulate the economy via the credit markets is severely hampered.

For more on this topic download the latest issue of “The Felder Report.”