Comments on: More Evidence of Sharp Contraction in Money Supply (Not for the Fainthearted) http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html Sun, 22 Nov 2009 13:16:39 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-37576 Anonymous Thu, 19 Feb 2009 23:03:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-37576 There is absolutely no evidence of contraction of the money supply... yet. The rate of increase of M3 has slowed steadily since early 2008 until about December 2008. But it has not contracted. <br/><br/>We are in an inflationary recession. There is absolutely no evidence of contraction of the money supply… yet. The rate of increase of M3 has slowed steadily since early 2008 until about December 2008. But it has not contracted.

We are in an inflationary recession.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13236 Anonymous Wed, 20 Aug 2008 08:36:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13236 I would like to take this opportunity to spread my thoughts on how to help reduce some of the mortgage problem we are facing.<br/>Allow those who have 401(k)'s and IRA's to make a one time withdrawal from their account with no penalties or taxation. This would go straight to a lending institution to either reduce or pay off a mortgage debt or allow those who need to make up a loss in housing price, refinance there home to a fixed mortgage. I would like to take this opportunity to spread my thoughts on how to help reduce some of the mortgage problem we are facing.
Allow those who have 401(k)’s and IRA’s to make a one time withdrawal from their account with no penalties or taxation. This would go straight to a lending institution to either reduce or pay off a mortgage debt or allow those who need to make up a loss in housing price, refinance there home to a fixed mortgage.

]]> By: jest http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13233 jest Wed, 20 Aug 2008 05:26:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13233 hmm, i mentioned this topic in the comments section here not too long ago.<br/><br/>the (rhetorical) questions that still remain are:<br/><br/>-how does this relate to the super hot PPI that came out today?<br/><br/>-is this decrease real or just noise?<br/><br/>-since the fed doesn't measure M3 is this data going to affect monetary policy in any real way? (i doubt they stopped paying attention to M3, b/c they probably still calculate it, they just don't report it.)<br/><br/>-if so, will this be the trigger that causes the fed to finally print?<br/><br/>we'd also have to look at high powered money in other nations as well. yves pointed out in a previous post that it's not the fed that's expanding money, it's foreign central banks. and it seems most of them are starting to turn dovish. hmm, i mentioned this topic in the comments section here not too long ago.

the (rhetorical) questions that still remain are:

-how does this relate to the super hot PPI that came out today?

-is this decrease real or just noise?

-since the fed doesn’t measure M3 is this data going to affect monetary policy in any real way? (i doubt they stopped paying attention to M3, b/c they probably still calculate it, they just don’t report it.)

-if so, will this be the trigger that causes the fed to finally print?

we’d also have to look at high powered money in other nations as well. yves pointed out in a previous post that it’s not the fed that’s expanding money, it’s foreign central banks. and it seems most of them are starting to turn dovish.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13228 Anonymous Tue, 19 Aug 2008 22:47:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13228 Maybe money is no longer currency. Maybe we got poker chips in our pockets and maybe the casino is about to be condemned.<br/><br/>Maybe it's time we studied the survival skills of those the G7 has plundered since Woodrow and the WZO and Balfour gifted us with reserve currency systems.<br/><br/>Maybe it's time we harvest the rich - that's why we have a zoo full of `em, right? That's why god created rich people, right? Mighty tender meat on the bones of the children from the Houses of the Unholy. And in troubled times, they make mighty good eating!<br/><br/>Eating the rich is not sport, it's the god given right of the proletariat!<br/>. Maybe money is no longer currency. Maybe we got poker chips in our pockets and maybe the casino is about to be condemned.

Maybe it’s time we studied the survival skills of those the G7 has plundered since Woodrow and the WZO and Balfour gifted us with reserve currency systems.

Maybe it’s time we harvest the rich – that’s why we have a zoo full of `em, right? That’s why god created rich people, right? Mighty tender meat on the bones of the children from the Houses of the Unholy. And in troubled times, they make mighty good eating!

Eating the rich is not sport, it’s the god given right of the proletariat!
.

]]> By: S http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13220 S Tue, 19 Aug 2008 19:28:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13220 Whether M is growing or not it is being held up on the stilts of the Fed baalnce sheet in hopes of mainting the illusion of an equilibrium. but that equilibrium is not sustainable. So the you can play the game and hope the wheel keeps turning. At some point this ends and the great sucking sound will ensue. let's hope a good portion of those dollar exports are being used for munition stores - only partially kidding. Whether M is growing or not it is being held up on the stilts of the Fed baalnce sheet in hopes of mainting the illusion of an equilibrium. but that equilibrium is not sustainable. So the you can play the game and hope the wheel keeps turning. At some point this ends and the great sucking sound will ensue. let’s hope a good portion of those dollar exports are being used for munition stores – only partially kidding.

]]> By: AnoninCA http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13219 AnoninCA Tue, 19 Aug 2008 19:11:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13219 That should be "I read blog <b>your</b> blog daily". Just trying to make the point that I have great respect for what you have to say. That should be “I read blog your blog daily”. Just trying to make the point that I have great respect for what you have to say.

]]> By: AnoninCA http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13218 AnoninCA Tue, 19 Aug 2008 19:10:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13218 Yves, I read blog daily, but I don't trust the data in this post.<br/><br/>According to the St Louis Fed's Fred database. M2 is about $7.7 trillion right now and as of their last data (2006) M2 comprised about 70% of M3. (So a $50 billion dip in M3 is just noise.)<br/><br/>The only M3 component series the Fed's now maintaining is Inst. Money Market Accounts, not surprisingly these figures have been increasing at an exponential rate through the credit crisis. What's been going on with the smaller categories of repos and long term deposits isn't clear, but it's also not clear that they are big enough components to generate huge changes -- especially given the surge in money market accounts.<br/><br/>It is true that M2 was flat from April through June, but that was only after stunning growth from January through March. Besides money supply measures are incredibly unstable, so it's a mistake to put too much emphasis on short-term trends (i.e. there's a reason the Fed found targetting money supply unreasonably difficult). Yves, I read blog daily, but I don’t trust the data in this post.

According to the St Louis Fed’s Fred database. M2 is about $7.7 trillion right now and as of their last data (2006) M2 comprised about 70% of M3. (So a $50 billion dip in M3 is just noise.)

The only M3 component series the Fed’s now maintaining is Inst. Money Market Accounts, not surprisingly these figures have been increasing at an exponential rate through the credit crisis. What’s been going on with the smaller categories of repos and long term deposits isn’t clear, but it’s also not clear that they are big enough components to generate huge changes — especially given the surge in money market accounts.

It is true that M2 was flat from April through June, but that was only after stunning growth from January through March. Besides money supply measures are incredibly unstable, so it’s a mistake to put too much emphasis on short-term trends (i.e. there’s a reason the Fed found targetting money supply unreasonably difficult).

]]> By: jm http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13210 jm Tue, 19 Aug 2008 17:36:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13210 Everyone should read "Balance Sheet Recession" by Richard Koo (former Chief Economist of Nomura) regarding Japan's lost decade. Everyone should read “Balance Sheet Recession” by Richard Koo (former Chief Economist of Nomura) regarding Japan’s lost decade.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13209 Anonymous Tue, 19 Aug 2008 17:10:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13209 When I look at the blowouts in credit spreads I wonder how much control the Fed has left.<br/><br/>Perhaps the Fed will open some more abc credit windows? How about a window for people that are upside down on their planned vacation? Maybe another for those that can no longer afford dental floss?<br/><br/>River When I look at the blowouts in credit spreads I wonder how much control the Fed has left.

Perhaps the Fed will open some more abc credit windows? How about a window for people that are upside down on their planned vacation? Maybe another for those that can no longer afford dental floss?

River

]]> By: Anonymous http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in.html#comment-13206 Anonymous Tue, 19 Aug 2008 16:50:00 +0000 http://www.nakedcapitalism.com/2008/08/more-evidence-of-sharp-contraction-in-money-supply-not-for-the-fainthearted/#comment-13206 I don't think so. Deleting M-3 was for good reason......to skew the remaining numbers. Leveraging continues at obscene rates. So far only debt has been moved around in exchange for Treasuries. In deflation the US$ bull would return and not just a bear dead cat bounce. Banks failures have been just forced consolidation with a few write downs, nothing like what is needed for liquidation which is true deflation. Moving debt to one balance sheet from another is not deflation.<br/><br/>It's like talking points from Government economists, obscure, confuse and pretend because the world economy could not withstand the effects of true deflation at this point in time. Delay delay delay. I don’t think so. Deleting M-3 was for good reason……to skew the remaining numbers. Leveraging continues at obscene rates. So far only debt has been moved around in exchange for Treasuries. In deflation the US$ bull would return and not just a bear dead cat bounce. Banks failures have been just forced consolidation with a few write downs, nothing like what is needed for liquidation which is true deflation. Moving debt to one balance sheet from another is not deflation.

It’s like talking points from Government economists, obscure, confuse and pretend because the world economy could not withstand the effects of true deflation at this point in time. Delay delay delay.

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