actually if you do a little digging {like i did tonight} you will see that Bernanke may be in on this idea. if this subject {measuring/reporting M3} is NOT talked about at the confirmation hearings i would say that would be a big red flag for us.
Useful link. Some of the comments taken from Bernake's "helicopter speech" are misleading the way they are quoted - they relate to other central bank options in a deflationary spiral besides dropping the , rather than an attempt to continue lowering short term interest rates (which are difficult to lower below zero). Those of you who have read my posts here on ET know that I have a strong opinion of Bernake as an anti-deflation hawk, rather than an inflation hawk, which is what I think his "inflation targets" relate to. Last time I checked (on vacation & not able to do my usual DD, sorry), China was a massive purchaser of our Treasuries. Recent auction this last week was interesting - surprising demand on the 30 year which took yields down from 4.84 to 4.73ish. I don't know who were the auction purchasers for this one. In my opinion, the discontinuance of M3 makes it very difficult to evaluate Euro$ (unless anyone else knows how to obtain that figure reliably) and may make it more difficult for the banks to evaluate credit. Could this decrease in transparency (oddly enough, coming from a new fed chairman who has openly stated he favors transparency) be being done to restore the risk premium that Greenspan has lamented being removed? If you don't have accurate statistics, how can you know? And if you don't know, don't you want to be compensated for increased risk? Just an idea. How this relates to China, I have NO idea. I can't decide if this is long term bullish or bearish for the dollar. Could be either - bullish in that M1 and M2 will rise slowly, favoring "controlled inflation" which supports the $. Bearish in that many traders may percieve a massive problem in the US$ and suggest that it is time to bail out. Need more info. Bernake after 6 months will show us by his actions what is to happen. Fascinating.
I am under the impression that as the ways of getting credit increases it becomes harder to measure money supply. The increase in the use of hybrid home loans will likely make it more difficult to organize money supply into neat categories and harder to total up money supply as a whole. I think that money supply numbers can only be used in general applications to show broad trends so I don't get too hung up on the precision of the number.
all i know is when you mix humans {human nature} with lots of money and you "reduce" the measurements or accounting of what is truly taking place ---- WATCH OUT! :eek: remember the great Refco ad --- "No Boundaries" LOL!
Interesting article for me since I don't follow M1, M2, M3 in general. http://www.safehaven.com/article-4108.htm Anyone have any comments on how active the goverment is in the stock market? ozz
fiat money only exists to the extent the public has faith in its value. although we've had massive inflation [of the money supply] for years, this hasn't really shown up as rising consumer prices. (except the stock market, bond market and real estate market) interesting to note Japan here. although they've been massively inflating the supply of yen, consumer prices have been dropping due to lowered demand. so why hasn't all this new yen shown up in consumer prices? because it's been used to buy us bonds. money not in circulation cannot cause rising prices. the result of this yen printing is to support the dollar and our bond market and our real estate market. very well designed plan. in reality, they've been consciously devaluing fiat currency, but as long as we don't see it in rising prices, the public's faith in the currency remains. (instead they say, "inflation is caused by Katrina", "inflation is caused by the greedy oil companies", etc.) it's obvious they are destroying the value of money for a strategic reason. greenspan is not dumb. he is in full realization of the effects of his policies: http://www.usagold.com/gildedopinion/Greenspan.html now it's possible that since he wrote that in 1967, he has learned the errors of his naive ways. something that i haven't learned yet (he is 30+ years older than me, and probably smarter as well). but there IS a reason for his actions. what that is? pure speculation. but it's not by accident and it's not for his "legacy".
The US dollar is only one part fiat money. I the gold at Fort Knox and the Fed Banks safes give a large part of the credibility that makes the world's reserve currency valuable
do you know how much gold backs the US money supply? the dollar is down 50 per cent vs. brazilian real in the last few years. it it is a slow movement away from the dollar until one day there will be a panic dollar selloff. ithe dollar will disappear as the fed tries to devalue the currency in order to fighe severe recession or tries to replace the dollar with a new currency in the name of fighting terrorist financing.. http://www.mises.org/freemarket_detail.asp?control=455&sortorder=articledate