Monetary Policy and the U.S. Dollar my personal note: These charts look like volcanic eruptions unlike any thing I've EVER seen
Submitted by nmlifestyles on Sat, 02/14/2009 - 22:10
One of the chief mandates of the U.S. Federal Reserve is to manage the nation's monetary stock. This essay analyzes the historic growth of the American monetary stock (or aggregates) since 1960 and looks at some recent developments revealing a marked adjustment in policy. These changes are a direct response to the on-going worldwide financial crisis that escalated in September 2008 following the collapse of Lehman Brothers.
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The rate of growth in money supply is so far decreasing
Look at the M3 money supply chart at this site, which he updates every week.
http://www.nowandfutures.com/key_stats.html
Of course the money supply keeps growing, but the rate of growth is anemic compared to the strong rate of growth in early 2008.
I regard this chart as depicting the front line of the monetary battle ground. The federal reserve and the US government is in a panic over keeping the money supply expanding at a rate sufficient to push the economy and to prevent prices from collapsing. If they lose the battle, then the banking system collapses, and perhaps the federal government also.
You can see their panic by looking at what they are doing to the rate of growth in the monetary base, which is what banks rely upon to expand their money creation.
http://research.stlouisfed.org/fred2/series/AMBNS
You need to select % change from a year ago (beneath the chart) to see the rate of change.
"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley
very interesting! "When
very interesting!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
What are you thoughts on inflation?
Just curious.
There are so many morons I can't keep track
http://www.jabronitools.com
_________________________
http://www.jabronitools.com
Opinions and as*holes have a commonality; everyone has one.
I am hardly an expert. Who knows; maybe that gives me more credibility. Ha! Ha!
Of course it is the intent of the federal government to borrow and spend in an attempt to keep the economy going and the banking system somehow afloat. Some people think this will finally get the money supply growing at a sufficient rate, and we will each go on to the next binge of living beyond our means, accompanied by recovery of prices.
One thing to watch is the price of gold and of silver in relationship to other commodities. If we get a sharp run up in both this spring or summer to levels significantly higher than they were in March, 2008, without a parallel run up in other commodities, then I think that is a sign that we will then deflate. I am thinking $2,000 gold and $30 silver at the peak. This is counter intuitive because most people will take this as a sign of coming hyperinflation, but to me it will be a sign that newly created money is being bled off into those monetary metals and not into the economy of products and services. And if the US dollar between now and this summer remains strong relative to other currencies, while gold and silver climb, this will reinforce my view of coming deflation. If it develops this way, then both gold and silver will turn around and make a quick trip to the bargain basement, and federal reserve notes under your mattress will be king; don't you know, that is why they invented king size mattresses.
I really don't know the answer. My personal investments for now are in gold and silver, both coins, bars, and mining shares, plus a few months of cash on hand and an extra supply of bulk food on hand. I am playing it be ear, so don't rely upon anything I say.
"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley