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Title: Whats the Fed Up To With the Money Supply?
Source:
Safe Haven
URL Source: http://www.safehaven.com/showarticle.cfm?id=4331&pv=1
Published: Dec 23, 2005
Author: by Robert McHugh
Post Date: 2005-12-23 13:05:23 by Horse
Keywords: Supply?, Whats, Money
Views: 894
Comments: 108
Over the past two days, December 21st - when our first Hindenburg Omen (of whatever cluster is coming) - and Thursday December 22nd, the Federal Reserve has conducted one of the largest two-day Repo injections of money into the system since back in September 2001. On Wednesday they added $18.0 billion in reserves and on Thursday they added another $20.0 billion. Is this a coincidence, coming right as we get another Hindenburg Omen? Probably not. Is something high-risk going on behind the scenes here? Let's review some facts at the Fed. On November 10th, 2005, shortly after appointing Bernanke to replace Greenbackspan, the Fed mysteriously announced with little comment and no palatable justification that they will hide M-3 effective March 2006. M-3 has been the main staple of money supply measurement and transparent disclosure since the Fed was founded back in 1913. It is the key monetary aggregate that includes Fed Repo transactions, that mechanism whereby the Fed increases reserves. The date when M-3 will start being hidden also happens to be the exact month that Iran will declare economic war against the U.S. Dollar by trading its oil in Petro-Euros on its new bourse. But there is more. The Federal Reserve currently has three vacancies within the 19 top Regional Bank and Board of Governor spots. Why? Part of ongoing wholesale resignations. The latest is from the Philly Fed. Fed President and Open Market Committee member Anthony Santomero has announced his resignation after only a brief year and a half tenure. Very unusual. Hey, Fed Presidents are treated like gods. They have enormous power, prestige, and presence. Why quit? He is far from alone. Over the past few years no less than six Federal Reserve Regional Bank Presidents have resigned. This is highly unusual. An immediate impact is that we are about to have a largely inexperienced batch of individuals conducting monetary policy in the United States. So of course, the first thing they will do is hide the key money figures. Two positions for the Board of Governors (there are 7)have been open for quite a while. Plus six of the 12 Regional Head spots have turned over during the past few years. If a substantial amount of oil transactions will suddenly be conducted in Euros instead of Dollars, this should put pressure on the Dollar as folks exchange Dollars for Euros, jeopardizing the Dollar's status as the world's reserve currency, making it more difficult to print all the dollars the Fed wants to without driving the Dollar into the ground. Iraq threatened to do what Iran has threatened to do just before we went in looking for weapons of mass disappearance. If the Dollar tanks, Treasuries might not be far behind. If Treasuries tank, kiss the Housing-driven boom goodbye. Could the Master Planners be hiding M-3 because they anticipate they may have to monetize the Federal debt, buy our own Treasury Bonds during the coming economic attack against the Dollar? That would require a ton of new fresh money creation - too much to disclose. Could it be some folks at the top of the Fed do not have the stomach to be part of what is about to go down? M-3 has a direct but lagging impact on financial markets. Look at the chart at the top of the prior page. Whenever M-3 rises, the Dow Industrials rise. Whenever M-3 is flat or declines, the Dow Industrials decline. The Dow Industrials are a bellwether for the economy. If we can monitor M-3, we can better monitor the future path of equities and the economy. It is wrong for the Fed to stop its disclosure for this very reason. Investors need to know in a free market economy, because M-3 infusion is centrally planned intervention into a free market system. Investors need to know when the Master Planners have decided to intervene. Our buy/sell signals were designed to pick up the scent of Master Planner intervention by analyzing supply and demand forces underlying the markets. So with or without a fully disclosed M-3, we will be able to continue to identify coming multi-week trends. So what about M-3 the past week? The latest figures show that on a seasonally adjusted basis, M-3 rose 27.3 billion last week, a 14.0 percent annualized clip, and is up $76 billion over the past month, a 9.8 percent growth rate. But those are the massaged numbers. For the raw figures, fasten your seat belt. Are you ready? M-3 was increased $58.7 billion last week (that does not include the huge Repo infusions noted above), a 30.0 percent annualized rate of growth. For the past two week, the Fed added $93.5 billion to the money supply, a 24.0 percent annual clip. Over the past 6 weeks it is up $192.9 billion, a 16.7 percent Banana Republic hyperinflationary pace. This is nuts, folks - unless there is an incredible risk out there we are not being told about. That is a lot of money for the Plunge Protection Team's arsenal to buy markets - stocks, bonds, currencies, whatever. This level of irresponsible money supply growth makes shorting markets hazardous, yet at the same time says markets are at huge risk of declining. Maybe M-3 growth doesn't stop the decline this time. Should be a fascinating storm in 2006. The recent rise in Gold catalogued 74 points over about a month, a 16 percent rally from precisely the day the Fed announced it would hide M-3 from taxpayers and citizens of this great nation. That is no coincidence. Gold sees hyperinflation, monetization of debt, and intervention into free markets. Gold is telling us it expects Ben Bernanke to be an inflationist.
Poster Comment: My apologies, but as usual with this computer I could not copy the chart. This article does tell us that the M3 money supply is growing at a fast clip. And as of April Fools Day 2006 the FED will no longer tell us how much money they are printing. I still believe that REPORTED INFLATION will be low during 2006,at least, until after the elections in November. But the real purpose is for Wall Street to unload their junk bonds, steal what has not yet been stolen and invest overseas so they can repatriate their funds after the dollar collapses buying America for pennies on the dollar.
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Begin Trace Mode for Comment # 24.
#2. To: Horse (#0)
Iraq did more than threaten. http://www.ratical.org/ratville/CAH/RRiraqWar.html "The Federal Reserve's greatest nightmare is that OPEC will switch its international transactions from a dollar standard to a euro standard. Iraq actually made this switch in Nov. 2000 (when the euro was worth around 82 cents), and has actually made off like a bandit considering the dollar's steady depreciation against the euro. (Note: the dollar declined 17% against the euro in 2002.) "The real reason the Bush administration wants a puppet government in Iraq -- or more importantly, the reason why the corporate-military-industrial network conglomerate wants a puppet government in Iraq -- is so that it will revert back to a dollar standard and stay that way." (While also hoping to veto any wider OPEC momentum towards the euro, especially from Iran -- the 2nd largest OPEC producer who is actively discussing a switch to euros for its oil exports)."
Iran has been feeling pretty frisky lately now that they have us sinking in the swamp of Iraq. Richard W.
It could very well be that Iran will go to selling oil for euros knowing full well it will trigger world war. I note that on the radio they report that the US dollar will close the year higher against most major currencies than it started the year. With the massive trade deficit we have (the largest as a percentage of gdp sustained this long in world history) the dollar should drop. and yet it rises. because it is an artificial currency, propped up artificially, given artificial strength. so that the people of the world can pay a tribute. think about it. We can buy without exporting to cover our purchases. Nobody else can. It is a system of tribute.
Of course it is. Our government acts exactly as you would exact any mafia street thug to act. Pay me protection and do what you are told, and nothing blows up. If you don't, well then maybe a train or something goes boom. Richard W.
that's the sad part - the more effectively we resist them, then the worse the 'terrorism' will get. that's one reason I don't really advocate thinking that we can win. I do advocate informing people and educating them.
Old proverb goes something like this: "When your enemy is busy destroying themselves, get out of the way and let them continue doing what they're doing". We don't have to win, we just have to survive, because this system is doing a fine job of tearing itself to pieces. Our efforts are best spent in thinking about what we want to build in the vacuum created by the sudden implosion of this system. Because if we don't have a plan, I can assure you that they do, and they're ready to implement it. Therefore I suggest that we spend less time talking about how bad things are, and instead talk about what we want to build once this nightmare passes. One other thought: Blind worship of the Constitution is not the solution, the Constitution is a great but deeply flawed document, and we need to ponder these flaws and come up with something new that embodies the spirt of the Constitution while also having a chance of working and persisting in the real world.
Agreed. However, although it is necessary to identify the flaws in the Consitution, and to develop ideas on how to fix them, such is not sufficient. The worst problem we've had hasn't been the flaws in the Constition, but rather the flaws in our society, in or schools, in our families and in our selves. No Constitution can remedy apathy, ignorance, indifference and willful disregard of the principles of right and wrong.
I'll agree with that .. .. even at the risk that I am in agreement with George Bush on this point when he said it was just a g. d. piece of paper. We don't follow the constitution one bit you know. The constitution says that congress is supposed to regulate the creation and management of our money supply. In practice the federal reserve (a private bank) does this, the federal reserve is never even audited, nobody knows what they do; and they just announced that they wouldn't even tell us what the money supply is any more. So, congress has completely capitulated and is not following the cosntitution on this point at all. The first ammendment is another example. Congress shall make no law restricting freedom of speech, etc. But congress does make laws specifically limiting political speech, and when the US Supreme court was asked if this was constitutional it did not even mention the First Ammendment in its ruling, it used a European court precedent to justify the restrictions on political speech that were done in laws passed by constitution. the constitution is just a g. d. piece of paper. We'd like it to be more, but it is not.
We'd like it to be more, but it is not. And a computer program is just electrons arranged in patterns to represent ones and zeros. A Consititition is like a computer program. The program can't run correctly if the machine that executes it is flawed. A Constitution can't operate correctly if the society that animates it is dysfunctional.
#25. To: sourcery (#24)
(bandwidth thief!...Grrr... plagerist maybe, but bandwidth thief? ?? If ya don't want your pic's served up, don't put'm on the web - Sheesh!)
Top • Page Up • Full Thread • Page Down • Bottom/LatestIraq threatened to do what Iran has threatened to do just before we went in looking for weapons of mass disappearance.
#3. To: Sam Houston (#2)
#4. To: Arete (#3)
#5. To: Red Jones (#4)
It is a system of tribute
#6. To: Arete (#5)
Pay me protection and do what you are told, and nothing blows up
#9. To: Red Jones (#6)
That's one reason I don't really advocate thinking that we can win. I do advocate informing people and educating them.
#19. To: Elliott Jackalope (#9)
Therefore I suggest that we spend less time talking about how bad things are, and instead talk about what we want to build once this nightmare passes.
#20. To: sourcery (#19)
No Constitution can remedy apathy, ignorance, indifference and willful disregard of the principles of right and wrong.
#24. To: Red Jones (#20)
the constitution is just a g. d. piece of paper.
Replies to Comment # 24. A Constitution can't operate correctly if the society that animates it is dysfunctional.
#27. To: sourcery (#24)
A Constitution can't operate correctly if the society that animates it is dysfunctional.
End Trace Mode for Comment # 24.