Post-facto money finance: US 1940 to 1951 High powered base money
60
40 30
Source: Friedman and Schwarz, Monetary History of the United States
1955
1954
1953
1952
1951
1950
1949
1948
1947
1946
1945
1944
0
1943
10
No subsequent reversal / ‘exit’ 1942
20
Post-facto permanent money finance
1941
Federal Reserve commitment to keep interest rates at 2.5% buying bonds to achieve target
50
1940
Large wartime budget deficits ‘funded’ by government debt issues
32