Hi all I'm not too familiar with the US M3 (and other money supply) figures, but one graph I saw showed the drop in M3 growth (to below zero, thus a drop in the level too) to be a now-vs-3months ago figure. In that case, could it not be a base effect from the big rise in July? http://www.bullandbearwise.com/MoneySupplyChgChart.asp Even so, I agree that there is a big crunch, but beware of reading too much into money supply info... There are so many near term distortions that even the ECB have given up on M3H. But then I'm not at expert on Dollar M1/2/3 so I won't claim to know the answer to this one
obviously occuring because people are taking their money out of large and small CD's, retail Money-Market Funds, and Savings Accounts and putting it into the U.S. STOCK MARKET!!!
Heard that verbatim just a few minutes prior to your post on CNBC... And I do believe this is part of the answer.
He likes the SUPPLY/DEMAND equation for the market and has now turned BULLISH for the first time in a long while, even though the Nasdaq is already +45% He says that there is a lack of new issues being offered in the upcoming calender, AND the recent spate of mergers and acquisitions is putting FRESH CASH into the pockets of portfolio managers. Look for any pullbacks to be brief and shallow. Too many fund managers are underperforming as it is. November is seasonally VERY STRONG for the equity markets!
Doug Noland explains the M2 and M3 situation very well in this week's Credit Bubble Bulletin http://www.prudentbear.com/archive_...gory=Credit+Bubble+Bulletin&content_idx=28216 One of the points he raises is the one from Waggie below.
Excellent article!!! A reclassification of liabilities from short-term to long-term ones is what is causing M3 to decline dramatically over the past 3 months. Very interesting!
Anthony Sampson writes, in "The Changing Anatomy of Britain", Random House, New York, 1982, Eurodollar Empire "Today, together with allies on the island of Manhattan (Britainâs most important piece of real estate), the British Empire controls the entire $1.5 trillion Eurodollar financial market, another $300-$500 billion in the Cayman Islands, Bahamas, and $50-$100 billion in the Hong-Kong Singapore "Asia-dollar market". . . . Consider the $1.5 trillion Eurodollar market an "outlaw" market in the U.S. dollars over which this nation has no control. Here control and profits are overwhelmingly in the hands of London banks, who set the terms of lending and the interest rate on this mass of American dollars in relation to the London Interbank Borrowing 182 Rate (LIBOR) . . . U.S. banks like Citibank (New York City), on whose board of directors sits the powerful British financier, Lord Aldington, collaborate openly in this market. At the same time, British banks including the known central bank for the worldâs drug trade, the Hongkong and Shanghai Bank, pour into America to devour U.S. banks. In 1978 the Hongshang (Ed.--Hongkong and Shanghai Bank) took over New Yorkâs Marine Midland Bank, the stateâs 11th largest commercial bank. . . The British also control the creation of American dollars. While Federal Reserve Board Chairman Paul Volcker tightens credit against the domestic economy, British-controlled banks in the Cayman Islands (such as the European American Bank--Ed.) a British possession 200 miles off Florida, and in the Bermudas and a dozen other "free banking" computer terminals create hundreds of billions of American dollars. How is this done? There are no reserve ratios or other restrictions on the creation of dollar-denominated credits in the Empireâs "free enterprise" banking. A $1 million bona fide credit coming from the United States can be turned into $20 to $100 million in dollar-denominated credits as it passes through the British system without reserve ratios."*