1. Will QE III Induce Just the Right Inflation

It is beginning to look as if the St Louis Fed’s M1 money multiplier (MULT) identified by Milton Freidman as an important indicator (perhaps the causation) of Great Depression is breaking out of its 46 month downward swoon. This graph below shows the path of the money multiplier over the past ten years.

Note the indication that the multiplier is turning up though still well below 1.0 its base level. These data are recent as of September 5, 2012.