The most common measures are named M0 (narrowest), M1, M2, and M3. In the United States they are defined by the Federal Reserve as follows: M0: The total of all physical currency, plus accounts at the central bank which can be exchanged for physical currency. M1: M0 + the amount in demand accounts ("checking" or "current" accounts). M2: M1 + most savings accounts, money market accounts, and certificate of deposit accounts (CDs) of under $100,000. M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements.
i read the embedded link about liquidity it was interesting as well....that`s what happens when you let the fox guard the chicken coop.......you take the head of GS and just install him as Treasury Secretary.....without any buffer between the two jobs.....sounds like he is just funneling money to his cronnies on wallstreet......no wonder we have all these rediculous highs worldwide in all the indexes.....but there will be unintended consequences from this printing press mentality; the precariousness of the bond market for starters. http://bigpicture.typepad.com/comments/2006/11/us_treasury_dep.html
Unfortunatly US FED did not use any of the M's since 1980 if i reckon right. By the way about the deflation. Do you remember what has happened after JAPAN went into delation after that wonderful years. Well their rates were at 0% nice huh, and the businesses getting killed. Hope it wouldnt happen to the US
Bingo!!! Fractional reserve banking's roots are in embezzlement & fraud. Yeah, back when it was just goldsmiths and warehouse owners, whenever they did a little of fractional reserve banking and got caught, they were taken to court for a crime. Today it is standard banking practice in most of the world. A central bank only reinforces this practice by being a bankbone for more reserves & liquidity if one of the club overlends themselves. That's why the Federal Reserve is a private corporation with exclusive shareholders. "Permit me to issue and control the money of a nation, and I care not who makes its laws." ~ Amschel Mayer Rothschild - 1838
Exactly. I'm just wondering who really wants all that money. The Fed has allowed the money supply to grow, but there has to be someone who is taking out the loans, who? Businesses are not investing much anymore, and the housing market has cooled down, so who are the borrowers? Anyone have any detailed data/guesses about this?
You would think that a slow housing market would slow down the demand for credit, but so far it hasn't. LBO's, mergers, sharebuy backs, structured products, commercial property are all lending a hand. Problem is that all of it is nothing more than financial transactions. There has been almost zero growth in capital investment which is the real long term driver of wealth. This system could gone for a while, but at some pointa large scale accident will probably cause the whole global system to blow up.
Well a $5 billion dollar fund blew up and the system did not even hiccup. Just like in LTCM case, a few of the big boy banks step in and buy up the fund's holdings at rock bottom price, moving on to make ridiculous profits. Except this time, the Fed does not need to make public statements how they will save the system, there is already so much paper floating around. You gotta understand that most of the world's biggest nations run the same system, deeply embedded in the institutions that run them. That is not by accident, there is history behind this. There is also a lack of understanding what fractional reserve banking really is, hence it's easy to push it through in emerging nations (i.e. China & Russia). Although the Russians ran it like bandits and did so much other nonsense that noone ever noticed the key flaw. As long as the masses have faith in fiat currency, I doubt anything will happen. If the central banks decide to attack each other, then a crash could happen (like the speculation that Japan or China may dump US debt). Only scenario if the system is collapsed on purpose by those in charge, you know, the whole New World Order conspiracy stuff.