Problem: Fed Chairman Ben Bernanke finally admitted that the Fed has been printing more new currency over the past few months to help stimulate the economy and more recently noted the economy may not yet be out of the woods, as some of us may already have concluded.. But, what about the money? I think we touched a bit on this subject in previous weeks but never came up with any concrete conclusions.
How much more money has the Fed printed and where is it now? Has it been stored in the Fed's vaults, given to member banks, or has it already been inserted into the economy; and if it has been inserted into the economy, how was it inserted and what affect is it having, if any? What affect will an increased M1 money supply have in the long-run?