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Market Oracle FREE Newsletter

Category: Money Supply

The analysis published under this category are as follows.

Economics

Monday, November 20, 2017

Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” / Economics / Money Supply

By: F_F_Wiley

Forget about big hair, Ray-Bans, and Donkey Kong. Don’t even think about Live-Aid, Thriller, and E.T. Above all else, the 1980s were the gravy days of the money supply aggregates.

Beginning in late 1979, the Fed built its policy approach around the aggregates—primarily M1 but occasionally M2, and policy makers also monitored M3 while experimenting with M1B and, later, MZM. But those were just the “official” figures. Economists and pundits debated the Fed’s preferred measures while concocting their own home-brewed variations.

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Interest-Rates

Thursday, April 28, 2016

Monetary Policies Misunderstood / Interest-Rates / Money Supply

By: Steve_H_Hanke

Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around ­­­taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either soar or dive.

This obsession with taper talk – the interest rate story – is simple, but strange. Indeed, it is misguided – wrongheaded. So, why the obsession? It is, in part, the result of a Keynesian hangover. The Keynesians focus on interest rates. The mainstream macro model that is widely in use today is referred to as a “New Keynesian” model. The thrust of monetary policy in this model is entirely captured by changes in current and expected interest rates (the price of money). Money is nowhere to be found, however.

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Interest-Rates

Tuesday, March 22, 2016

U.S. Monetary Policy Kaleidoscopic Context / Interest-Rates / Money Supply

By: Mike_Shedlock

Dennis Lockhart, Atlanta Fed president, made a speech today trumping up the possibility rate hikes as soon as April.

In his speech, Lockhart cited "sufficient momentum evidenced by the economic data to justify a further step at one of the coming meetings, possibly as early as the meeting scheduled for end of April."

Let's dive into his speech and also put a spotlight on his claim of "sufficient momentum."

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Interest-Rates

Sunday, March 13, 2016

Money Velocity Proves Q.E. Failure / Interest-Rates / Money Supply

By: Jim_Willie_CB

The current monetary policy is stuck in place. It is highly destructive to banking systems, working capital, and financial markets. Yet it continues ad infinitum, actually until the great collapse. A systemic Lehman event is in progress, as the global financial structure is collapsing. The only remedy is the Gold Standard installation, which is happening, but its architects are from the East. They are labeled as enemies, when the root problem is in the Western banking hive.

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Interest-Rates

Thursday, March 26, 2015

The Monetary Approach Reigns Supreme / Interest-Rates / Money Supply

By: Steve_H_Hanke

We are still in the grip of the Great Recession. Economic growth remains anemic and below its trend rate in most parts of the world. And what’s more,  this state of subdued economic activity has been with us for over seven years.

In the U.S. (and elsewhere) the central bank created a classic aggregate demand bubble that became visible in 2004. The Fed’s actions also facilitated the creation of many market-specific bubbles in the housing, equity, and commodity markets. These bubbles all dramatically burst, with the bankruptcy of Lehman Brothers in September 2008.
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Interest-Rates

Thursday, November 06, 2014

The End of QE Is Not the End of Bad Policy / Interest-Rates / Money Supply

By: MISES

John P. Cochran writes: Recently the financial press and media has been abuzz as the Federal Reserve moved closer to the anticipated end to its massive bond and mortgage backed securities purchases known as quantitative easing. James Bullard, President of the St. Louis Federal Reserve Bank, stirred controversy last week when he suggested the Fed should consider continuing the bond buying program after October. But at the October 29th meeting, the policy makers did as anticipated and “agreed to end its asset purchase program.” However one voting member agreed with Mr. Bullard. Per the official press release, “Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level” (emphasis added).

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Currencies

Friday, October 03, 2014

The Velocity of Money Myth… / Currencies / Money Supply

By: Alasdair_Macleod

If there is one concept that illustrates the difference between a top-down macro-economic approach and the reality of everyday life it is the velocity of circulation of money. Compare the following statements:

“The collapse in velocity is testament to the substantial misallocation of capital brought about by the easy money regimes of the past 20 years.” Broker’s research note issued September 2014; and

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Economics

Friday, December 20, 2013

Fiat Money Quantity and it's Increasingly Likely Hyperinflation / Economics / Money Supply

By: Alasdair_Macleod

By November, the most recent month for which statistics are available, the US Fiat Money Quantity (FMQ) had grown to $12.351 trillion. This is $4.96 trillion more than it would be if it had grown in line with the established average monthly growth rate from 1960 to the month before the Lehman Crisis. By this measure monetary inflation since August 2009 is now 67% above trend. This is illustrated in Chart 1 below.

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Economics

Tuesday, May 21, 2013

Hot Money, Cold Credit - Misguided Monetary Policy / Economics / Money Supply

By: Steve_H_Hanke

Money matters — it’s a maxim of Prof. Milton Friedman that I repeat often in my columns. Since the Northern Rock bank run of 2007 — the "opening shot" of the financial crisis — the money supply, broadly measured, in the United States, Great Britain, and the Eurozone has taken a beating. Recently, in the United States, money supply growth has started to rebound, but only slightly. In the U.K. and the Eurozone, things are much worse. This is cause for concern, because the quantity of money and nominal gross domestic product are closely related.

Not surprisingly, in the U.S., growth has been anemic, at best. In the U.K., the economy has fluctuated between stagnation and recession. And, in Europe, growth has been replaced by the Eurozone’s longest recession ever. Indeed, 9 of 17 E.U. countries that use the euro are in a recession, including France, and Eurozone unemployment sits at a record 12.1%.

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Economics

Monday, March 25, 2013

Exponentially Accelerating Money Supply / Economics / Money Supply

By: Alasdair_Macleod

The monthly figures for the US dollar components of Austrian, or True Money Supply, for February are now in. TMS plus excess reserves amount to the quantity of money that can be drawn down without notice, including time deposits that in practice can be instantly drawn down without notice, only foregoing interest. This is shown in the long-term chart below.

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Economics

Tuesday, November 27, 2012

Age Of Illusionists, Focus on Government Spending and Money Supply / Economics / Money Supply

By: Steve_H_Hanke

Watching Barack Obama and Mitt Romney duel in the presidential campaign should have convinced the spectators that we live in an age of illusionists. Few of the assertions and conjectures thrown around have been subjected to what the political chattering classes deem to be the indignity of factual verification.

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Economics

Wednesday, October 24, 2012

U.S. Monetary Cliff? Fed Dilemma Will Continue for Many Years / Economics / Money Supply

By: Axel_Merk

Best Financial Markets Analysis ArticleAs the presidential election is rapidly approaching, little attention seems to be getting paid to the question that may affect voters the most: what will happen to the “easy money” policy? Federal Reserve (Fed) Chairman Bernanke’s current term will expire in January 2014 and Republican candidate Mitt Romney has vowed that if elected, he would replace Bernanke. Given the tremendous amount of money the Fed has “printed” and the commitment to keep interest rates low until mid-2015, the election may impact everything from mortgage costs to the cost of financing the U.S. debt. Trillions are at stake, as well as the fate of the U.S. dollar.

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Economics

Wednesday, October 24, 2012

Inexorable Money Supply Growth / Economics / Money Supply

By: Michael_Pento

The economies of Southern Europe continue to experience extreme duress. For example, the bad loans of Spanish banks jumped to 10.5% in August, which is up 17 straight months and has increased from just .72% at the end of 2007. However, the answer provided by governments and central banks to propel the economy is to create more of the same condition that brought about the problems in the first place. That is, to increase the level of base money in the hopes of increasing the rate of broad money supply growth and inflation. But despite the fact that inflation is already growing at 2.6% in the Eurozone, Mario Draghi is still promising to do whatever it takes to dilute the Euro’s purchasing power and create more inflation.  

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Economics

Monday, February 14, 2011

Economists Lost in a Maze of Money Aggregates? / Economics / Money Supply

By: Robert_Murphy

Best Financial Markets Analysis ArticleOne of the most important concepts in economic theory is the quantity of money. However, when going from theory to practical application, things get messy. In the real world, it's not obvious how to count up the amount of "money" in the economy at any given time.

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Economics

Thursday, February 03, 2011

Inflationary Indications of the Broadest Measure of Money Supply / Economics / Money Supply

By: Richard_Daughty

The Gold Report interviewed John Williams of ShadowStats.com, who said, "I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006. Generally, the broader the measure of systemic liquidity, the better it serves as a predictor. In terms of giving a signal for the economy, you have to adjust the growth for inflation."

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Interest-Rates

Wednesday, December 22, 2010

Monetary Watch December 2010: The Money Supply, a Triple From Here? / Interest-Rates / Money Supply

By: Michael_Pollaro

Best Financial Markets Analysis ArticleOur monthly Monetary Watch, an Austrian take on where we are on the monetary inflation front and what’s next…

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Economics

Wednesday, November 03, 2010

Making Sense of the Money Supply / Economics / Money Supply

By: Chris_Riley

Best Financial Markets Analysis ArticleWith the Fed’s rapid expansion of the monetary base in recent years, many commentators have pointed out that this has not led to growth in the money supply and hence the Fed is powerless to deal with “deflationary” forces in the economy.

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Economics

Thursday, September 02, 2010

I Renounce Monetarism, That Money Supply is a Leading Indicator for Aggregate Demand / Economics / Money Supply

By: Paul_L_Kasriel

Diamond Rated - Best Financial Markets Analysis ArticleMonetarism, the notion that the behavior of some definition of the money supply is a leading indicator of aggregate demand, is akin to malaria. Once it is in your "system," it is very difficult to totally purge it from your system. Early in my career, I was strongly sympathetic toward monetarism. In the late 1990s, I was introduced to the Austrian school of economics, in particular, the Austrian theory of the business cycle (ATBC). I was immediately sympathetic to the ATBC because bank credit played such an important role in it.

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Economics

Sunday, August 01, 2010

Austrian Money Supply Metrics, Now Global / Economics / Money Supply

By: Michael_Pollaro

On April 19th, 2010,  I penned an essay called Money supply metrics, the Austrian take in which I presented the logic behind what I believe to be the correct formulation of the money supply, one based on the monetary insights of the Austrian school of economics.

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Economics

Saturday, July 17, 2010

The Money Supply Conspiracy / Economics / Money Supply

By: Richard_Daughty

Best Financial Markets Analysis ArticleMarin Katusa is Chief Energy Strategist for Casey Research, which probably made it easier for him to get his stuff into Casey’s Daily Dispatch, whereas no matter what I write, they always say to me, “This is crap! Stop sending us your Stupid Mogambo Crap (SMC)! It’s crap! It’s always crap!”

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Politics

Friday, May 28, 2010

Mysterious Money Supply Discrepancies, Government Cover-up Full Horror / Politics / Money Supply

By: LewRockwell

Best Financial Markets Analysis ArticleRichard Daughty writes: Being an inveterate conspiracy theorist who is absolutely convinced that the government is full of morons, lunatics and traitors, not to mention legions of hired goons with badges, and who have, I maintain, been hovering above my house in an invisible helicopter to shoot thought-control rays into my brain all the time (zzzt!) so that now all I can hear is voices in my head urging me to “Burn! Burn everything!”

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Economics

Thursday, May 27, 2010

The Deflationary Consequences of M3 Money Supply / Economics / Money Supply

By: Andy_Sutton

Best Financial Markets Analysis ArticleGiven the fact that we sit on the precipice of a holiday weekend, every attempt will be made to keep this short and to the point. M3 growth has collapsed. We had pointed this out several months ago and again more recently amidst a barrage of protest emails that the printing press always wins the battle with the deflationary black hole. To date, the black hole is winning hands down. The reasons are nebulous and complex, but the point is that our broadest monetary aggregate is now shrinking. This does not bode well for our economic prospects moving forward.

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Stock-Markets

Sunday, May 02, 2010

Stock Market Sentiment and Monetary Aggregates - Watch Out Paperbugs! / Stock-Markets / Money Supply

By: Adam_Brochert

Best Financial Markets Analysis ArticleThe whole M1/M2/M3/MZM (among others) monetary aggregate thing is pretty dry and I am no expert on which one is most important and the fine distinctions between them. It's all paperbug drivel to intellectualize an unsustainable debt-backed paper currency system in my opinion. However, one thing is clear: when the higher monetary aggregates (e.g. M2 and M3) start declining precipitously, you can bet a recession is on the way with a high probability of being right.

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Economics

Wednesday, April 21, 2010

Money Supply Metrics, the Austrian Take / Economics / Money Supply

By: Michael_Pollaro

Diamond Rated - Best Financial Markets Analysis ArticleAll economists, whether they are of an Austrian, a Keynesian or a Monetarist bent, as well as nearly every investor, would agree that money plays a vitally important role in the economy.  And a correct measure of its supply is an indispensable input into every economic and financial forecast.  How could it not, for money is one half of every economic transaction.

Yet, despite its importance, the money supply metrics used by the majority of today’s economists and investors are seriously flawed, for they are founded on a faulty definition of money.

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Politics

Wednesday, April 14, 2010

Help the Poor by Stopping the Money Printing Press / Politics / Money Supply

By: LewRockwell

Best Financial Markets Analysis ArticleRichard Daughty writes: I am happy to note that the Tea Party, which appeals to me personally, is gaining traction and power, which adds more political overtones to my life and gets me, a shameful Republican, away from the loathsome Republicans (except Ron Paul), which have acted almost as despicably as the Democrats.

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Economics

Wednesday, January 27, 2010

Fed Starting to Unwind Loose Monetary Policy, Could Trigger Secondary Recession / Economics / Money Supply

By: Gary_North

Diamond Rated - Best Financial Markets Analysis ArticleOfficials at the Federal Reserve System insist that the FED will unwind its more than doubled monetary base. They do not say when. They do not say how. But they insist that they will do this when the economy recovers.

The FED has begun this process. The press has not paid any attention to this, but the evidence is unmistakable. Any time you want to monitor any of this, search Google for "Federal Reserve charts." You can see for yourself.

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Economics

Monday, January 25, 2010

Will the Velocity of Money Save the U.S. Economy? / Economics / Money Supply

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleBefore we get started, let's get the forecast update out of the way. With the release of November business inventories data, we have revised up significantly our real GDP annualized growth rate for Q4:2009 - from last month's projection of 3.5% to 4.5%. Again, it is a sharp slowing in the rate of inventory liquidation that is driving this upward revision. Our projection of the annualized growth rate for final sales in Q4:2009 is 1.6%, just one tick above Q3's reported growth. So, the anticipated surge in top-line fourth-quarter growth is largely an inventory story. Unless, however, final demand begins to grow faster, the inventory story of the last year's fourth quarter will be a one-off event.

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Economics

Monday, December 14, 2009

It’s “Money in Circulation” Stupid / Economics / Money Supply

By: Joseph_Toronto

During the 1991 recession (if you can call it that) Bill Clinton made a campaign issue of “It’s the economy stupid.” It’s true, it is all about the economy. But it’s also a little more fundamental than that. It’s something that people have known intuitively for centuries. In a good economy, there was always “plenty of money” and in hard times it was “money is scarce”. Things haven’t changed, except that now those responsible for money creation are intentionally clouding the picture with all kinds of economic jawboning (dutifully reported daily by the media) to create a paranoia of both hyperinflation and deflation.

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Economics

Saturday, October 24, 2009

What Is Money?, Monetary Reform / Economics / Money Supply

By: Gary_North

Best Financial Markets Analysis ArticleAn obvious response to the information that I have presented in the first eight parts of this series is this: "What should we do to reform the system?" This is a nice sentiment. It ignores the obvious: "we" have nothing to say about monetary reform.

Central banking is the most brilliant device of profit-seeking monopolists and oligopolists in human history. Nothing else comes close. Hardly anyone understands it, so there is no organized opposition.

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Economics

Tuesday, September 01, 2009

Failure of U.S. Money Supply to Grow Points to Economic Stagnation and Monetization of Debt / Economics / Money Supply

By: Ned_W_Schmidt

Best Financial Markets Analysis ArticleInvestors should be taking some clues from the thinking of American voters. Their view, as documented by the respected Rasmusen polling organization, is rejection of the growth killing policies of the Obama Regime. Per Rasmusen, a mere 46% of voters approve of Obama Regime while 53% disapprove. The vote is in on the economic prospects for the U.S. due to policies of the failing and fading Obama Regime, and it is in the negative column.

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Currencies

Thursday, June 25, 2009

Fiat Currency in Circulation, How Much Money is There? / Currencies / Money Supply

By: Mike_Hewitt

Best Financial Markets Analysis ArticleThere are several different monetary aggregates used to measure a nation's money supply. These monetary aggregates can be thought of as forming a continuum from most liquid (money as a means of exchange) to the least liquid (money as a store of value).

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Economics

Saturday, June 13, 2009

The Bankers Are Scared, Are You? / Economics / Money Supply

By: LewRockwell

Diamond Rated - Best Financial Markets Analysis ArticleGary North writes: "What, me worry?"

From its beginning in 1954, the official representative of Mad Magazine has been Alfred E. Newman. He is a dim-witted looking fellow, always smiling. His slogan is, "What, me worry?"

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Economics

Monday, April 27, 2009

Money Supply Multipliers, Velocity, and Excess Reserves / Economics / Money Supply

By: Mike_Shedlock

Best Financial Markets Analysis ArticleInquiring minds are reading the Quarterly Review and Outlook by Van Hoisington and Dr. Lacy Hunt. It's an excellent report so let's take a look at some commentary and charts.

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Interest-Rates

Tuesday, April 14, 2009

Bernanke's Un-shrinkable Fed Balance Sheet / Interest-Rates / Money Supply

By: Michael_Pento

As he stated again clearly today, the Chairman of the Federal Reserve has deluded himself into thinking that when the time comes, he will be able to shrink the size of the Fed’s balance sheet and reduce the monetary base with both ease and impunity. He also has deluded himself into thinking inflation will be easily contained.

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Economics

Wednesday, February 04, 2009

The Money Printing Secret- Collapse in the Money Multiplier / Economics / Money Supply

By: Paul_Lamont

Best Financial Markets Analysis ArticleHeroes And Villains - In June of 1966 (similar to the warm sunny days of summer in 1929 and 2007 ), Brian Wilson produced the Beach Boys' single “Good Vibrations.” Capturing the positive feelings of the day, it quickly became a number one hit. But something had changed in 1967 when the Beach Boys moved on to their next album: Smile .

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Economics

Thursday, January 29, 2009

Fiat Currency Seigniorage ("The Inflation Tax") / Economics / Money Supply

By: Mike_Hewitt

Best Financial Markets Analysis ArticleBefore becoming Governor of the Federal Reserve, Ben Bernanke co-authored several text books familiar to college students studying economics. In one of these text books, Macroeconomics , the question of whether government budget deficits can lead to ongoing increases in the money supply is both asked and answered.

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Commodities

Tuesday, January 27, 2009

Global Money Supply and the Value of Gold / Commodities / Money Supply

By: Mike_Hewitt

Diamond Rated - Best Financial Markets Analysis ArticleMike Hewitt and Krassimir Petrov writes: Introduction - In this essay we attempt to estimate global money supply and relate it to global supply of gold. For the global money supply, we use money supply figures for currency in circulation from 86 selected currencies, from 81 independent countries and five monetary unions. For the global supply of gold, we use data from the World Gold Council (WGC). Finally, we attempt to interpret the price of gold as a relationship between global money supply and global gold supply.

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Economics

Thursday, January 22, 2009

Why the Money Supply is Collapsing / Economics / Money Supply

By: Joseph_Toronto

Best Financial Markets Analysis ArticleInflation and deflation are almost always monetary phenomena as are booms and busts, recessions and depressions. The current economic environment has surprised nearly everyone with the sharpness of the decline, it's suddenness and it's sheer ferocity. To better understand what is happening in the economy and how it began, I believe it is helpful to understand the nature of modern money and banking, and the central bank's role.

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Commodities

Wednesday, January 21, 2009

Money Supply Growth Will Drive U.S. Dollar Lower and Gold Higher / Commodities / Money Supply

By: Ned_W_Schmidt

Best Financial Markets Analysis ArticleThe 1930s was the birth of Keynesianism. Economists needed a simple answer as to why they had been so wrong. Since then, the U.S., and much of the rest of the world, has endured 70 years of economic concepts that have generated a continuous lack of success in economic matters. Most professions would seriously review their methodology when faced with as many repeated failures. Not so for the economics community. They just keep coming with more of the same failed policies.

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Economics

Monday, January 12, 2009

Growth of Global Money Supply / Economics / Money Supply

By: Mike_Hewitt

Diamond Rated - Best Financial Markets Analysis ArticleThis essay analyzes the growth of the money supply for 73 selected currencies from 90 countries. Nineteen of these countries belong to two monetary unions - the European Union and the East Caribbean Union. 1 Together, these countries make up 96.7% of the world's Gross Domestic Product (GDP) and 84.1% of the world's population . 2

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Economics

Friday, December 26, 2008

US Economic Output vs Money Supply / Economics / Money Supply

By: Eric_deCarbonnel

Best Financial Markets Analysis ArticleWhether prices rise or fall depends on what is happening with a nation's economic output and money supply. If one is growing/shrinking proportionally faster than the other, you get inflation/deflation. For example, if the money supply is growing faster than economic output (what happens during normal economic times), you get inflation.

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Economics

Friday, December 19, 2008

Inflationary Consequences of Fed Policy of Monetary Panic / Economics / Money Supply

By: Ned_W_Schmidt

Best Financial Markets Analysis ArticleMeasurement is perhaps second greatest problem in establishing satisfactory economic policies for a nation. That matters because those economic policies influence the value of the nation's money on foreign exchange markets. In the case of the U.S. dollar, that $Gold has risen in value by more than 150% in the past ten years is unquestionably a failing grade for U.S. economic policy makers. Inflation measurement may be part of that inadequacy as it was used as a rationale for easy money.

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Economics

Sunday, December 07, 2008

Why Bailouts Will Lead to Inflation Not Deflation / Economics / Money Supply

By: Money_Morning

Best Financial Markets Analysis ArticleMartin Hutchinson writes: The U.S. Producer Price Index (PPI) and Consumer Price Index (CPI) both fell in October. Those declines – combined with sharp downward spirals in worldwide stock and commodity prices – have caused many analysts, and even central bankers, to worry that we are on the brink of deflation.

Such concerns may be warranted in the short-term. But in the long run, deflation won't be the challenge we face.

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Interest-Rates

Wednesday, December 03, 2008

Central Banks Open the Money Printing Floodgates to fight Deflation / Interest-Rates / Money Supply

By: Gary_Dorsch

Diamond Rated - Best Financial Markets Analysis ArticleIn the early 1980's, the Federal Reserve's headlines figures for the M1, M2, and M3 money supply aggregates flashed at the top of trader's radar screens, and jolted US T-bill rates by 50-basis points or bond yields by 30-points within minutes. Inflation was raging at a 10.7% annualized rate, and repeated attempts to cure it had failed. Former Fed chief Paul A. Volcker was doggedly pursuing a radical monetary policy that led to skyrocketing interest rates and two back-to-back recessions.

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Economics

Sunday, November 30, 2008

Bernankes Money Printing Helicopters are Here! / Economics / Money Supply

By: Mike_Hewitt

Best Financial Markets Analysis ArticleThe US Federal Reserve is increasing the monetary base at an unprecedented rate in response to the present deflationary asset crunch, following the longest running inflationary boom in the country's history.

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Commodities

Tuesday, November 18, 2008

US Explosive Money Supply Growth Bullish for Gold / Commodities / Money Supply

By: Ned_W_Schmidt

Best Financial Markets Analysis ArticleCentral banks around the world are indeed doing everything but dumping money out of helicopters. That inflationary rush has been led by Federal Reserve. Ignoring the fact that easy money has been a failed policy twice in recent years, to wit the technology stock bubble and the housing bubble, FOMC is pursuing most inflationary policy in that organization's dismal 95-year history.

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Commodities

Sunday, November 02, 2008

U.S. Money Supply Growth to Lead to Higher Inflation and Gold Price / Commodities / Money Supply

By: Ned_W_Schmidt

Best Financial Markets Analysis ArticleIn the past few weeks, U.S. Federal Reserve has joined with U.S. Treasury in an attempt to remedy the financial fiasco. In that effort, the Federal Reserve's balance sheet has ballooned by more than 50%. Never in peace time history has the central bank for the world's reserve currency so intentionally implement policies that will destroy the value of that reserve currency .

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Economics

Tuesday, October 21, 2008

The U.S. FED: What! Me Worry? / Economics / Money Supply

By: David_Haas

Best Financial Markets Analysis ArticleFrom time-to-time, I like to swing by the Federal Reserve Bank of St. Louis (FRBSL) website to check on their “aggregate” monetary and financial indicators and measure the pulse of our nation's economic base - which is the overall supply of money and credit in the United States economy.

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Economics

Thursday, August 21, 2008

Revisiting US Money Supply M3 Contraction / Economics / Money Supply

By: Mike_Shedlock

Best Financial Markets Analysis ArticleMany have been writing asking how the chart and commentary in M3 Contraction - The Future Is Now can possibly be correct. Here is the chart and a snip of text once again for convenience. The key sentence below is in RED.

The Telegraph is reporting Sharp US money supply contraction points to Wall Street crunch ahead .
The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.

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Economics

Thursday, August 21, 2008

Collateral Economic Damage in the War Between Inflation and Deflation / Economics / Money Supply

By: Adrian_Ash

Best Financial Markets Analysis Article"...The shooting-match between inflation in prices and deflation in assets is still a long way from won..."

WHICH WAY now for financial assets? Given what pumped them up, starting in late 2002, you're better off asking which way for money itself.

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Interest-Rates

Tuesday, August 19, 2008

US Money Supply and the Bond Market Blackhole / Interest-Rates / Money Supply

By: Rob_Kirby

Best Financial Markets Analysis ArticleWith a show of hands, how many people really believe the U.S. Bureau of Labor Statistics when they report that inflation is running at 2 – 4 %? 

I'm not seeing very many hands. 

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Economics

Tuesday, August 19, 2008

US M3 Money Supply Contraction Points to Deflation / Economics / Money Supply

By: Mike_Shedlock

Best Financial Markets Analysis ArticleThe Telegraph is reporting Sharp US money supply contraction points to Wall Street crunch ahead .

The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months.

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Interest-Rates

Tuesday, July 15, 2008

Senators Blast Bernanke on Monetary Policy Failures / Interest-Rates / Money Supply

By: Mike_Shedlock

Best Financial Markets Analysis ArticleEarlier today Bernanke Chairman Ben S. Bernanke testified Before the U.S. Senate in the Fed's Semiannual Monetary Policy Report to Congress. I commented on his testimony in Bernanke's Hogwash .

In an unusual but encouraging development, someone besides Ron Paul is calling Bernanke on his hogwash. Please consider Bunning Statement To The Senate Banking Committee On The Federal Reserve Monetary Policy Report .

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Economics

Monday, July 14, 2008

Global Money Supply Data and Comparison for 2008 / Economics / Money Supply

By: Mike_Hewitt

Best Financial Markets Analysis ArticleThis essay makes comparisons between the money supply of 25 selected economic areas and discusses the ratios between the values of official gold reserves to outstanding currency.

For the purposes of this essay, the Euro-Zone includes the thirteen countries that use the Euro currency: Austria, Belgium, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. China includes Hong Kong. All other economic areas are individual countries.

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Economics

Monday, July 14, 2008

An More Accurate Measure of the Money Supply TMS or M3 ? / Economics / Money Supply

By: Mike_Shedlock

Diamond Rated - Best Financial Markets Analysis ArticleThere has been an interesting discussion between Steve Saville and Paul van Eeden over the monetary aggregates M3 and TMS.

For those not familiar with TMS it stands for True Money Supply and it is a monetary measure based on Austrian economic principles. I will come back to the description of TMS in a moment but let's listen to a couple of discussion points from Steve Saville and Paul van Eeden first.

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Interest-Rates

Saturday, June 28, 2008

Fed Money Supply and Aggregate Credit Not Fueling US Inflation / Interest-Rates / Money Supply

By: Paul_L_Kasriel

Best Financial Markets Analysis ArticleOne of the tenets of that now allegedly defunct economic schools, monetarism, is that you cannot judge the stance of monetary policy by the level of the policy interest rate. Sometimes a 2% fed funds rate might be accommodative; sometimes restrictive. Right now, the 2% fed funds rate is not the catalyst for excessive growth in the money and credit aggregates. Let's start with the credit directly created out of thin air (similar to counterfeit money) by the Federal Reserve - the monetary base.

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Economics

Monday, June 23, 2008

Central Banks Will Be Printing Money Like There's No Tomorrow / Economics / Money Supply

By: Captain_Hook

Best Financial Markets Analysis ArticleThat's what master planners will be doing in continuing efforts to offset a collapsing credit cycle. And we are just a few short weeks away from when this should begin in earnest. Why not right now? Why will this likely take until July to begin in earnest? Well, for one thing master planners (heavy on the sarcasm) have it their minds they need to talk the dollar ($) up right now, at least until things start falling apart again. This is official Fed policy at present, and orthodox hedge fund managers are supporting it, along with selling commodities and precious metals. And the other thing is the stock market. As mention many times this year, hedge funds are locked into a sell commodities / precious metals and buy the $ / stocks trade for the present quarter that will be pushed aggressively right until the end of June.

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Interest-Rates

Monday, June 23, 2008

Fed Interest Rate Cuts Have Fed Food and Fuel Inflation / Interest-Rates / Money Supply

By: Andy_Sutton

Best Financial Markets Analysis Article“Between a rock and a hard place” - Over the past few months, the US Federal Reserve, amid much fanfare, has lowered the benchmark interest rate from 5.25% to 2%. This loose policy was lauded by those in the financial media as being the right thing to do to prop up the economy, and banks in particular. Bernanke went from being the goat to the hero almost overnight. Rest easy folks, our Fed Chairman is on board; finally having gotten with the program.

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Interest-Rates

Tuesday, June 17, 2008

Central Banks Clash Over Monetary Policy / Interest-Rates / Money Supply

By: Mike_Shedlock

Best Financial Markets Analysis ArticleFood and energy prices are soaring everywhere. Eurozone inflation is a record 3.7%
Inflation in the eurozone has a climbed to a record level amid higher food and fuel costs, official figures show. The annual rate of inflation in the 15 state zone hit 3.7% in May, according to the Eurostat statistical office.

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Politics

Monday, June 09, 2008

Rising Energy Prices and the Falling US Dollar / Politics / Money Supply

By: Dr_Ron_Paul

Oil prices are on the minds of many Americans as gas hits $4 a gallon, and continues to surge. How high can prices go? How can we solve these problems? What, or who, is to blame?

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Economics

Friday, June 06, 2008

Ben Bernanke Soaking the Rich at Harvard / Economics / Money Supply

By: John_Browne

Best Financial Markets Analysis ArticleThis week I watched Fed Chairman Ben Bernanke charm the rain soaked graduating class of Harvard, my Alma Mater. As he spoke, I was reminded of an anecdote that President Franklin Roosevelt was alleged to have made during the commencement speech he gave at Harvard in 1936. Amidst a similar downpour, Roosevelt apparently said, “Well, Harvard sure knows how to soak the rich!” Fittingly, Bernanke graduated from Harvard in 1975, and his current policies are doing just that. 

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Stock-Markets

Thursday, May 29, 2008

Currencies that are Certificates of Wealth Confiscation- The Crack Up Boom, Part I / Stock-Markets / Money Supply

By: Ty_Andros

Best Financial Markets Analysis ArticleLast summer, Tedbits did a series outlining the unfolding “Crack Up Boom” written about by Ludvig Von Mises. It was well received, to say the least. Now we return to it as the “Crack Up Boom” is front and center to analyzing unfolding economic and political events. The collapse of income and living standards in the G7 (trough misstated inflation) is combining with the “something for nothing” broad social trend to push the “Crack Up Boom” into a higher gear. Malinvestments are collapsing at an increasing rate and public servants and central banks are reacting predictably. They are printing the money as they always have and always will, accelerating the arrival of the global CRACK UP BOOM. They are explicitly saying they will print the money.

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Economics

Saturday, May 17, 2008

Rampant Money Supply Growth and Inflation / Economics / Money Supply

By: Zeal_LLC

Best Financial Markets Analysis ArticleDue to all kinds of prices rising to levels that would have seemed inconceivable only a few years ago, inflation concerns are mushrooming today. And if there is anyone still not worried about inflation yet, they soon will be. Rising food and energy costs really affect the daily lives of nearly everyone on the planet.

But inflation is woefully misunderstood, even among financially-sophisticated folks who should know better. I've heard Chairmen of the Federal Reserve, elite Wall Street analysts, and countless news-media personalities claim rising prices are inflation . This common misperception is flat-out wrong. Rising prices alone are not necessarily inflation. Inflation is purely and exclusively a monetary phenomenon.

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Economics

Monday, May 05, 2008

Money Supply, Inflation, Deflation and Gold / Economics / Money Supply

By: John_Lee

Best Financial Markets Analysis ArticleMoney serves as a medium of exchange and store of value. Price provides an important clearing mechanism in a society. Here we are going to explore the interesting dynamics between money and price. In a free market, when the quantity of money is fixed, the fact that the price of an apple is $1 and that of a Parker pen is $2 has tremendous implications. It takes knowledge, ingredients  and time to grow an apple while it involves branding, material, and capital to produce a Parker pen.

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Economics

Sunday, April 27, 2008

Alan Greenspan: The Age of Hubris (and the long road back) / Economics / Money Supply

By: Clif_Droke

Best Financial Markets Analysis ArticleHubris is an amazing thing. It causes those infected by it to justify actions that would normally be indefensible.

Take Alan Greenspan, for instance. He recently penned an editorial in the Financial Times claiming that under his leadership, the Federal Reserve is blameless on the property bubble. No way could the Greenspan Fed have foreseen the devastation its money policy of 2001-2006 would inflict on the housing market and the larger economy. “It wasn't my fault. Don't blame me,” claims Alan.

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Economics

Saturday, April 26, 2008

How the Economy Really Works- Inflation, Money Supply and the Velocity of Money / Economics / Money Supply

By: John_Mauldin

  • Best Financial Markets Analysis ArticleThe Velocity Of Money
  • Is the Money Supply Growing or Not?
  • P=MV
  • A Slowdown in Velocity
  • If You Are in a Hole, Stop Digging
  • And More Write-offs to Come

The late and great Milton Friedman told us that inflation is always and everywhere a monetary phenomenon. But there is an asterisk to his equation that we need to examine, namely, the velocity of money. Sometimes a fast-growing money supply is not as inflationary as you might think. Then we will take quick looks at why the banking sector is in for more and larger rounds of write-offs, as well as note that the housing industry is in a hole but is gamely digging itself deeper. This week's letter will require you to put your thinking cap on as we travel to a mythical island to get an understanding of how the economy really works. There are a lot of charts, so the letter may again print long, but the word length is normal. And with no "but first," we jump right in.

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Politics

Friday, April 25, 2008

G7 Government Malfeasance Results in Huge Transfer of Wealth to Hard Asset Investors / Politics / Money Supply

By: Ty_Andros

Best Financial Markets Analysis ArticleThis week we are stating some very painful truths about what is unfolding. It is a story of BETRAYAL by the people who run the United States and G7. Make no mistake, I love the United States but despise the government as it embodies the definition of immorality, incompetence, greed and hubris. Government is very competent at gathering power over others and making money for the people who run it and their contributors.

Combined with the public schools which do not teach anything anymore, the government is a testament to institutionalized malfeasance on every level. Words have become MEANINGLESS to the general public as they no longer know the history of their forefathers or the definitions of the words they speak and hear. We truly have entered the time of George Orwell's 1984 Animal Farm . It is a sorry state of affairs.

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Economics

Wednesday, April 23, 2008

Zen and the Art of Monetary Mayhem / Economics / Money Supply

By: Adrian_Ash

"...Just like the Bank of England , the US Fed seems to have Britney-sized 'issues' with its core stock-in-trade – money itself..."

PROFESSOR TIM BESLEY , one of the nine people chosen to set interest-rate policy at the Bank of England in London , gave a speech on Tuesday about "Inflation and the Global Economy".

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Economics

Monday, April 21, 2008

George Soros, Economic Illiteracy and Monetary Policy / Economics / Money Supply

By: Gerard_Jackson

Best Financial Markets Analysis ArticleSoros's main thrust against economics is that it is based on the theory that markets bring supply and demand into balance thus securing the best allocation of resources. He argues that this theory cannot apply to the real world because it is based on the model of perfect competition, on which he thinks modern economics depends.

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Politics

Monday, March 24, 2008

Banking Institutions Present Clear and Present Danger to American Citizens / Politics / Money Supply

By: Darryl_R_Schoon

Best Financial Markets Analysis ArticleThe Die is Cast- The Case Will Die - If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, (i.e., the "business cycle") the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. Thomas Jefferson, President of the United States 1801-1809

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Commodities

Friday, March 21, 2008

Easter Message- Filthy Lucre and Maundy Money / Commodities / Money Supply

By: Adrian_Ash

"...If the Queen never carries any cash, what does she keep in that stout little handbag...?"

SO THE MONEY-CHANGERS didn't get thrown out of the temple this Easter Week. Instead, they got open-ended support from the money-lender of last resort, and snapped up a near-broken bank for $2 a share.

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Economics

Saturday, March 15, 2008

Monopoly Goes Live…with an Inflationary Twist / Economics / Money Supply

By: David_Petch

Best Financial Markets Analysis ArticleMonopoly is one of the most popular board games ever created, which was first patented in 1935 by Charles Darrow. The object of the game is to accumulate as much of the property over the course of the game until everyone else is wiped out…there are more eloquent ways to define the rules, but the above definition is the blunt version.

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Economics

Thursday, February 28, 2008

US Money Supply Growth? Look to China / Economics / Money Supply

By: Chris_Galakoutis

Like the earmark hidden so deep inside a new appropriations bill committee report that it takes a magnifying glass to find, so too the lengths we apparently need to go in figuring out the degree of money supply growth in the US.

But is it really such a mystery?

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Economics

Wednesday, February 06, 2008

Opening the Mint to Gold and Silver - Last Chance to Stabalise the US Dollar! / Economics / Money Supply

By: Professor_Emeritus

Best Financial Markets Analysis ArticleA sequel to "The Double Whammy of Geopolitical Global Gold Games" - In my last article I suggested that the superpowers China, Russia, and the United States may be, without they knowing it, racing towards reopening their Mints to the monetary metals. The governments of these countries are like the heroes of Greek tragedies: they are drawn to their fate by destiny. There is no way for them to avoid Kismet, regardless of what they do. Many readers have asked me to explain what the term "opening the Mint to the unlimited coinage of gold and silver free of seigniorage charges" means.

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Economics

Wednesday, February 06, 2008

Is Monetary Policy Destroying Our Manufacturing Base? / Economics / Money Supply

By: Gerard_Jackson

In both America and Australia the fear that the manufacturing base is shrinking to the detriment of the economy seems to garner more by the week. Australia's Labor Government has expressed the opinion that the fall in manufacturing as a proportion of GDP is of deep concern. Our so-called free market commentators mock this view, arguing that it is a historical trend that merely indicates that consumer demand has largely moved from manufacturing to services, and this is only to expected as an economy grows richer. In defence of this viewpoint they invoke the law of diminishing marginal utility. This law states that demand for a good will fall as more of it is produced. Hence the shift to services.

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Commodities

Tuesday, February 05, 2008

End of the Credit Cycle Conundrum for Commodities / Commodities / Money Supply

By: David_Petch

Inflationary cycles are always manifested towards the end with rises in commodity prices that become equivalent to a black hole where money gravitates. Increasing the supply of money is the very definition of inflation, with rising prices being a symptom. Interest rate cycles tend to last 20-30 years starting from a decline to a base, followed by peak. Central banks use interest rates as the brakes of an economy and is the primary tool used under fiat currencies. Central Banks could stop printing money, but that would lead to a deflationary collapse, which is not a desirable outcome…so inflation it is. After interest rates rise to cool things on a Cycle Degree, periods of declining interest rates occur which will often see a decline in prices.

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Economics

Friday, February 01, 2008

United States Exporting Inflation Worldwide - From Credit to Money, Part II / Economics / Money Supply

By: Adrian_Ash

"Living in a credit era, we cannot go back to a currency era without massive upheavals..."- Robert L.Smitley, Popular Financial Delusions (1933)

WHY DON'T we just do away with all the different currencies of the world, and settle on one single money to buy, sell, invest and light our cigars with?

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Economics

Monday, January 28, 2008

US Economic Booms and Busts and Monetary Policy History / Economics / Money Supply

By: Gerard_Jackson

The extent to which media commentators are ignorant of economic history, let alone basic economics, is genuinely staggering. We got a good look at this ignorance when the 1990s boom was compared to the 1960s boom. Then many of the same commentators started to compare the stock market boom with tulipmania or the South Sea Bubble. The crash, of course, was invariably described as an innate feature of capitalism, except if it happens under a Republican president: then it's his fault.

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Stock-Markets

Tuesday, January 22, 2008

Retrospective: The Mysterious Case of Massive Liquidity / Stock-Markets / Money Supply

By: Mack_Frankfurter

Best Financial Markets Analysis ArticlePerhaps when a man has special knowledge and special powers like my own, it rather encourages him to seek a complex explanation when a simpler one is at hand. ” — Sherlock Holmes, The Adventure of the Abbey Grange (1904)

It now seems so long ago, but it is only a year since global equity markets were entrenched in a relentless march upward, spurred by the “world growth story” and a wave of global liquidity. U.S. and European stock markets gained double-digit returns in 2006 while the emerging markets did even better. Alongside the upward trajectory came a remarkable decline in volatility with the VIX, known as the “fear gauge,” falling to 13-year lows in November and December that same year.

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Economics

Saturday, January 19, 2008

Bush Stimulus Plan - $500 Tax Rebate for Everyone! / Economics / Money Supply

By: Brent_Harmes

Best Financial Markets Analysis ArticleI couldn't believe it.  I was sitting in the airport the other day waiting on my flight and CNN mentioned that the government is seriously considering helping our economy make it through this credit crunch by giving each of us a check for $500! 

Here is a quote from The Associated Press about it.

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Economics

Saturday, January 12, 2008

Gold Price Rise a Consquence of Inflationary Global Expansion Money Supply / Economics / Money Supply

By: Peter_Schiff

Holding onto its "all is well" bias like a terrified cowboy on an enraged bull, Wall Street has managed to convince itself, and much of the world, that inflation is a non-issue. When confronted with facts to the contrary, their rationalizations come fast and thick. Nowhere is this spin more pronounced than in their dismissal of the surging price of gold as a relevant indicator.

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Commodities

Wednesday, December 26, 2007

Contracting Credit Cycle and Monetary Debasement During 2008 Equals Commodities Super Cycle / Commodities / Money Supply

By: Captain_Hook

Best Financial Markets Analysis ArticleThe Need For Speed – Part Deux : The credit crunch continues to worsen , where very soon attempting to paper over all problems with more derivatives and bailouts will no longer work, and authorities will be compelled to increase currency (just another derivative) debasement rates to higher thresholds around the world. Correspondingly then, and as was the case in the early to mid-80's to stimulate the US economy, expect Money At Zero Maturity (MZM) growth rates to top 40-percent in coming days as authorities are forced to monetize increasing bank failures and facilitate ‘price stability'. The technical underpinnings associated with this condition can be viewed here in Figure 6 , where if history is a good guide, year-over-year growth should continue to accelerate higher in coming days.

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Economics

Friday, December 21, 2007

The Battle Between Inflation and Deflation - Money Supply to Decide Outcome / Economics / Money Supply

By: Peter_Schiff

Among those rational enough to perceive the looming economic downturn, a heated debate has arisen that centers on whether the slowdown will be accompanied by inflation or deflation.

Those in the deflation camp believe that money supply will collapse as a natural consequence of the implosion of the biggest credit bubble in U.S. history. As loans go bad, assets, which collateralize these loans, will be sold at fire sale prices to satisfy creditors. It is also argued that a recession will reduce consumer discretionary spending, causing retailers to slash prices to move their bloated inventories. This is the way the situation played out in the 1930's and this is how many expect it to happen today.

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Economics

Monday, December 17, 2007

US Fed Inflationary Money Printing Intervention Does More Harm than Good / Economics / Money Supply

By: Michael_Pento

Crying All the Way to the Bank - The Fed has angered many and pleased few in its ongoing effort to unclog the credit markets. They have lowered the Fed Funds rate a total of 100bps to 4.25% in the last three meetings and have also taken the Discount rate down to 4.75%. Most market pundits clamor for the Fed to ease more aggressively in an attempt to bolster flagging market returns. Meantime, an increasingly rare strategist argues for a stable currency and low inflation. In light of the recent actions by our Central Bank, I thought it important to lay out the reasons why it would be better for our economy if the Fed allowed the free market to work.

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Interest-Rates

Wednesday, December 12, 2007

Worlds Central Banks to the Rescue with $110 billions / Interest-Rates / Money Supply

By: Nadeem_Walayat

The Worlds Top 5 Central Banks in an unprecedented move joined forces at 2pm GMT to make $100 billions available to the retail banking market. The important point is that unlike previous liquidity boosts, the monies will be made available at favourable market rates which are much lower than the interbank rate.

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Interest-Rates

Wednesday, December 12, 2007

Merrill Lynch and Morgan Stanley Expect US Recession During 2008 / Interest-Rates / Money Supply

By: Gold_Investments

Gold
Gold was up $4.00 to $811.60 per ounce in New York yesterday and silver was up 3 cents to $14.67 per ounce. Subsequent to the Federal Reserve's 25 basis point interest rate cut gold fell in the less liquid New York Access market and erased the earlier gains. In volatile trade gold then fell as low as $796 but then rallied strongly and again erased the short term losses and in Asian and early European trading gold has been strong was at $807.50 at the today's London AM Fix. Gold was largely flat in pounds sterling and euros and at the London AM Fix gold was trading at £394.77 GBP (up from yesterday's London AM Fix at £393.79) and €549.21 EUR (up from yesterday's London AM Fix at €549.15). http://www.lbma.org.uk/statisti cs_current.htm Read full article... Read full article...

 


Economics

Tuesday, December 04, 2007

Importance of the Gold Standard - US Economy: Deficits, Foreign Debt and Monetary Policy / Economics / Money Supply

By: Gerard_Jackson

Best Financial Markets Analysis ArticleIt seems that it was only yesterday that economic commentators were almost hysterical over the US economy's trade deficit. Added to that was the view that the country's growing foreign debt would bring the economy down. Now that the deficit is shrinking fewer people are drawing attention to it, though they still harp on about the foreign debt

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Economics

Wednesday, November 28, 2007

United States Diseased Monetary Bloodstream / Economics / Money Supply

By: Professor_Emeritus

Invited Address Delivered on November 18, 2007, in Torrance, California,  to a Joint Session of the Positive Deviant Network and the Flight to Genius movement:

Dear Fellow Deviants, Dear Fellow Travelers standing by for the next flight to Genius, Ladies and Gentlemen: Synergy Be With You!

One of the truly spectacular sights is from the airplane as it makes its approaches to Los Angeles International Airport at dusk. Down below is the illuminated “live” map of Los Angeles with its winding and intersecting freeways, with an endless flow of white headlights and an opposite flow of red tail-lights. It reminds me of the human bloodstream with its flow of white and red blood corpuscles. As I was flying in the other day I could not help but contemplate that possibly just a handful in a million people down there may realize what a fatal year 2007 has been, as the rest are completely oblivious to the great dangers awaiting the world on this Thanksgiving Day.

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Economics

Monday, November 26, 2007

Market Fundamentalism and the Tyranny of US Monetary System / Economics / Money Supply

By: Richard_C_Cook

Best Financial Markets Analysis ArticleRecommendations for Reform of the US Monetary System

We hold these truths to be self-evident, that all men are created equal,
that they are endowed by their Creator with certain unalienable rights,
that among these are life, liberty and the pursuit of happiness.

1. What We Must Do Today
“Life, liberty, and the pursuit of happiness” are, or should be, the fruits of democracy. But the political democracy defined by the Declaration of Independence and the Constitution has not been achieved because economic democracy has not been achieved. The attainment of real economic democracy is the next task for the American people.

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Economics

Tuesday, October 23, 2007

Economy Swamped by Confusion as Money Supply Goes Wild / Economics / Money Supply

By: Gerard_Jackson

What passes for economic commentary these days is enough to drive one to drink. Let's start with Mike Steketee, another of Rupert Murdoch's resident lefties. He tells us that Nicholas Gruen — an economist — “found that cutting taxes for low and middle-income earners generated the largest response in increased employment”. This is just another version of the consumption-drives-the-economy fallacy. Read full article... Read full article...

 


Economics

Tuesday, October 16, 2007

Consumer Spending Spree Creates Bad Vibes for the Economy / Economics / Money Supply

By: Gerard_Jackson

We can divide economic commentators in to two basic groups: The first one consists of what we can loosely term free market commentators while the second one consists of interventionists. Alan Wood and Terry McCrann are representative of group one. The sad thing is that neither group offers any serious economic commentary. Right now Australia is undergoing a boom, consumer spending is rocketing — as is the trade deficit — inflation is about 3 per cent and the unemployment figures have been slashed.

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Stock-Markets

Friday, October 05, 2007

Hologram Tam & the Great Global Banking Money Supply Swindle / Stock-Markets / Money Supply

By: Adrian_Ash

Best Financial Markets Analysis Article"...If forgery were a question of quantity as well as quality, the world's entire private banking system would be queuing up for porridge tomorrow morning..."

THOMAS McANEA was a drunk, an ex-con freed on a technicality, and a failed businessman with barely "two pennies" to rub together, according to the Scottish police.

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Economics

Tuesday, September 25, 2007

C.H. Douglas: Founder of Modern Monetary Reform Movement / Economics / Money Supply

By: Richard_C_Cook

C.H. Douglas (1879-1952), a Scottish-born engineer, who worked for a number of American and British companies in the early years of the twentieth century, was the founder of the modern monetary reform movement. My own interest in monetary reform dates from discovering Douglas's ideas through a reprint of A.R. Orage's articles about them in Orage's publication The New Age dating from the 1920s.

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Economics

Monday, September 24, 2007

Central Banks Playing The Paper Game Bring the World Close to Hyper Inflation / Economics / Money Supply

By: Captain_Hook

Best Financial Markets Analysis ArticleApparently we have arrived – arrived at the point where any and all problems encountered must now be papered over – and we've gone global in this regard. You might want to listen to Jim Sinclair's talk on why the derivatives problem will necessarily lead us into hyperinflation. I'm not sure I agree with all his assertions, however the primary message is undeniable, and the market action is backing such claims, so they must be taken seriously. In this regard, let's take a quick look at money supply now to ensure our thinking is on the right track. Wouldn't you know it, in addition to monetization efforts taking off (growing at a 14% annualized rate), which of course we already knew about, growth rates in visible measures including both Money At Zero Maturity (MZM) and M2 are also going vertical, which gold is correctly responding to then. Here, these are not quite what would be considered hyperinflationary levels, but they are damn close --- close enough to talk about mild hyperinflation.

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Stock-Markets

Sunday, September 09, 2007

The Federal Reserve: Putting out a fire with Gasoline / Stock-Markets / Money Supply

By: Bob_Kirtley

The Federal Reserves answer to the problem caused by too much money in the system is to print more money. Further dilution of the once almighty dollar continues with it dropping two cents over the last three weeks for a loss of 2.4%.

On the other hand gold has gained $40.00 over the same period for a gain of 6%.

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Economics

Friday, August 31, 2007

US Monetary Data is Not Painting a Pretty Picture / Economics / Money Supply

By: David_Urban

Well, MZM and M2 have begun to take on a parabolic looks as the compounded annual rate of change increased to 9.7 and 6.4%, respectively, from a year ago. MZM growth is giving me the chills just looking at the chart. This does not look good from an anti-inflation perspective. You can say that the helicopter drops have started. Take it all in now because when the party ends you will not want to be around for the cleanup.

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Economics

Wednesday, August 29, 2007

The Result of 35 Years of a Paper Global Monetary System / Economics / Money Supply

By: Paul_L_Kasriel

I’ll skip the thousand words – the picture says it all.

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Commodities

Wednesday, August 29, 2007

Spot Gold Prices Rally in London as Asian Stocks Dive, Eurozone Money Supply Surges / Commodities / Money Supply

By: Adrian_Ash

SPOT GOLD PRICES rallied in the first-half of London trade on Wednesday, adding $4 per ounce from the overnight low to hit $666 after Asian stock markets ended the day sharply lower.

A UK hedge fund said it may have to liquidate $6 billion in assets due to the ongoing global credit crunch. The European Central Bank announced that growth in its M3 measure of the Eurozone's money supply surged to a quarter-century record in July, rising by 11.7% from a year earlier compared with 10.9% growth in June.

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Economics

Monday, August 27, 2007

Bottlenecks and Monetary Policies: More Economic Fallacies that Damage Economies / Economics / Money Supply

By: Gerard_Jackson

The cry is going up from our economic commentariat that the Australian economy is running into “production constraints” and that this in turn will drive up interest rates. It is also argued that this situation is likely to be compounded by the inflationary effects of rising wages. This nonsense, readers, is what passes for economic wisdom, not only in the Australian media but also the world-wide media. Listen out for the same arguments appearing more and more frequently in the US as the Bush boom gets close to its economic economic denoument, unless the Fed unexpectly slaps on the monetary brakes .

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Stock-Markets

Tuesday, August 21, 2007

US Financial Markets Rocked — What Is Really Happening / Stock-Markets / Money Supply

By: Gerard_Jackson

Last week I alerted readers to the possibility of a cut in the Fed funds rate. As sure as God made little apples, a cut is exactly what we got — except that it was the discount rate that was cut. For those of you who gave a sigh of relief at the Fed's “timely intervention”: take a deep breath because at some time in the future we will get a rerun of this financial fiasco and the Fed won't be able to stop it without igniting a severe inflation. Assuming for a moment that the Fed took this risk, the result in all likelihood would be a run on the dollar followed by an immediate increase in the funds rate on the heels of which would emerge an unavoidable recession.

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Economics

Tuesday, July 31, 2007

Global Money Supply / Economics / Money Supply

By: Mike_Hewitt

This essay makes comparisons between the money supply of 26 selected economic areas and discusses the ratios between the value of official gold reserves to outstanding currency.

For the purposes of this essay, the Euro-Zone includes the thirteen countries that use the Euro currency: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovenia and Spain. All other economic areas are individual countries.

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Economics

Tuesday, July 24, 2007

Composition of the U.S. Money Supply / Economics / Money Supply

By: Mike_Hewitt

How much U.S. money is in circulation? Printed currency and coins amount to less than US$800 billion. This represents only a small portion of the total money supply. The following essay shows the composition of various monetary aggregates used by the Federal Reserves to define the total amount of money available.

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Economics

Saturday, July 21, 2007

Return Of The Gold Standard / Economics / Money Supply

By: James_West_2

We humans are remarkably committed to self delusion.

From the personal level to the most powerful government on earth, we contrive realities with distorted perspectives so we can execute ideas that would otherwise cause us to hesitate if we were to objectively and honestly consider their moral implications. The moral code is constantly being revised to accommodate current events.

World War I is a perfect example.

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Economics

Wednesday, July 11, 2007

The Crack-up Boom Series Part V, Introduction - It's Bigger Than Just the dollar! / Economics / Money Supply

By: Ty_Andros

For greater insight into our publication, have a look at the Overview of Tedbits . It helps current and potential subscribers understand our mission in serving you. It also gives a broad description of what's unfolding globally and what you can expect from Tedbits as a regular reader.

Crack-Up Boom Series Intro

The Crack Up Boom series is exploring the unfolding “Indirect Exchange” (as detailed by Ludvig Von Mises), that dollar holders will be using to exit their holdings now and eventually is will be followed by all holders of fiat currency holdings no matter which country is perpetrating the “crime” of confiscation of wealth through the printing and credit creation process that all such monetary schemes evolve into.

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Economics

Tuesday, July 03, 2007

Credit as a Public Utility: the Key to Monetary Reform - Part 2 / Economics / Money Supply

By: Richard_C_Cook

A continuation of Richard C Cook's two part article on reforming the US Monetary System - Click Here for Part 1

THE AMERICAN EXPERIENCE

Monetary matters were clearer in England's American colonies. From the founding of Jamestown in 1607 to late in the American Revolution in 1779 there was not a single bank in North America. Goods were bartered, coinage entered the colonies through trade, and even Indian wampum was utilized. But all this was insufficient, so the colonial governments began to issue their own paper money. Notes were issued to landowners who use their land as collateral, or, in Virginia, to owners of tobacco in government warehouses.

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Economics

Tuesday, June 26, 2007

Credit as a Public Utility: the Key to Monetary Reform - Part 1 / Economics / Money Supply

By: Richard_C_Cook

We live in an era of deregulation, where economists and politicians speak of “the market,” not government, as the appropriate vehicle for economic decisions. President Ronald Reagan said in his 1981 inaugural address, “Government is not a solution to our problem, government is the problem.”

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Housing-Market

Monday, June 25, 2007

Home Equity Extraction - Sources and uses of "free cash" / Housing-Market / Money Supply

By: Tim_Iacono

The update to the Greenspan/Kennedy report (.pdf) on home equity extraction was a real page-turner. Seriously, it was pretty good. Economists at the Fed have once again demonstrated why they get paid the big bucks to collect data, assemble tables, and produce fifty page reports with appendices, references, and footnotes all in the proper places.

Unfortunately, as is usually the case, they didn't come to many conclusions or provide nearly enough interesting charts.

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Economics

Friday, June 22, 2007

Cash is Not King - What Have You Bought For Me Lately? / Economics / Money Supply

By: Andy_Sutton

In the 1930's during the Great Depression, there are literally thousands of cases where people stuffed money under their mattresses because they were scared of putting it in banks. They had confidence that when they needed the money six months or a year later that it would buy them what they needed to survive. The fact that we were in a deflationary depression validated their strategy. In a deflationary environment, cash is King. Hold onto it and it will buy at least as much as it did when you stuffed it under the bed, maybe even more. I think that a few too many Americans paid a little too much attention to these stories and automatically assume that the same strategy will work today.

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Interest-Rates

Wednesday, June 20, 2007

Interest Rate Rises - Damned If You Do... / Interest-Rates / Money Supply

By: Adrian_Ash

"...The central bank in New Zealand now presents the absurd spectacle of raising its lending rates while trying to depress its own currency by selling it in the open market..."

IF YOU WORRY that the US Fed might be caught between a rock and a hard place – squeezed between inflation on one side and plunging house prices on the other – then pity the poor central bankers in London and Auckland .

Every time they raise their interest rates, house prices increase!

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Economics

Tuesday, June 05, 2007

Economist Illustrates Why the Fed Should First Do No Harm / Economics / Money Supply

By: Paul_L_Kasriel

In the June 4th edition of The Wall Street Journal, Greg Ip has written a piece explaining why the National Income and Product Account data, the data from which GDP estimates are derived, can be confusing and erroneous for various reasons (see "Options Hinder Efforts to Gauge Economic Growth,").

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Economics

Sunday, June 03, 2007

The International Consequences of the Federal Reserve / Economics / Money Supply

By: Gerard_Jackson

I have written numerous times on the consequences of the Fed's loose monetary policy and how it can aggravate the current account deficit. Until recently figures confirmed my worst fears that the current account was racing along unabated. But what else should one expect given the monetary boom that the Fed unleashed. Now the actual CAD figures don't matter -- what matters is the trend and the reason for it. The reason has already been established and is now monetary history.

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Economics

Wednesday, May 30, 2007

The Changing Face of the US Dollar from Tangible Asset to a Fiat Currency / Economics / Money Supply

By: Mike_Hewitt

The US dollar changed from a currency backed up by a tangible asset to a fiat currency. That being a paper note backed up by governmental promises. By looking at the history of American paper money one can clearly see the distinction. 

Compare the images of the following historic dollar bills to those in your wallet today. Certain previously displayed phrases have been simply eliminated.

US$1 Silver Certificate

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Economics

Monday, May 28, 2007

Monetary Theory Of E.C. Riegel / Economics / Money Supply

By: Christopher_Quigley

Introduction
In a life spanning over 70 years one of the greatest students of money and its meaning was the American E.C. Riegel. Many regarded him as a genius for his understanding of the nature and functioning of money as a human and social institution. This essay is an introduction to his main ideas on this subject as increasingly people are beginning to realise the need for a more stable monetary unit. In essence in his book "Flight From Inflation" he identified money as the mathematics of value and argued that for a democracy to thrive he believed the "money power" must be free.

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Economics

Friday, May 25, 2007

Sound Money Sound Society / Economics / Money Supply

By: Christopher_Quigley

This article is a summary of work by Professor Antal. E Fekete , Professor Heinrich Rittershausen and Ferdinand Lips.

Summary
The World's developing financial crisis is totally inter-connected with a crisis of monetary theory and until we change how money works we will change nothing. What is required is a return to a solid monetary standard that is also a return to a more moral standard, which protects real work and long-term monetary value.

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Economics

Thursday, May 24, 2007

Paper, Rock, Gold : Why does Money have Value? / Economics / Money Supply

By: Mike_Hewitt

There are two commonly held views as to why money has value:

1. People are willing to accept it as payment (social convention)
2. The government says so (government decree)

The first reason, that being that money has value because people are willing to accept it as payment is nothing more than a circular argument. It states that money has value because it is accepted. Why is it accepted? …because it has value!

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Economics

Wednesday, May 23, 2007

How is Money Created? / Economics / Money Supply

By: Mike_Hewitt

The Federal Reserve Bank of Chicago used to publish a pamphlet entitled Modern Money Mechanics , which explains M1, M2, and M3. It is a truly fascinating read. That pamphlet is no longer in print, and the Chicago Fed has no plans to re-issue it. However, electronic copies are available (see link ).

In it, the process by which the Fed creates money “out of thin air” is detailed. Consider the opening paragraph:

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Economics

Tuesday, May 22, 2007

When will the Bush Credit Driven Boom Crack? / Economics / Money Supply

By: Gerard_Jackson

Unfortunately every credit fuelled boom ends in recession. Although no one can really predict the actual timing of a recession one can look out for certain danger signals, the major one being manufacturing. Once manufacturing finds itself in a profits squeeze rising costs start to bite into profit margins it will have no choice but to discharge labour, cut back on investment and reduce output.

After a while the manufacturing contraction will reach down into the consumption stages of production, at which point it will be officially declared that the economy has tanked.

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Stock-Markets

Monday, May 07, 2007

US Money Supply Scam, Welcome to the Ponzi World / Stock-Markets / Money Supply

By: Dr_William_R_Swagell

Born in Parma, Italy, Ponzi immigrated to America in 1903 and was quick to show his entrepreneurial flair.

In 1908 he was imprisoned for two years in a Canadian prison on forgery charges relating to a fraudulent high-interest scheme. Shortly after his release from jail Ponzi was once again arrested for smuggling illegal Italian immigrants from Canada into the U.S. He spent a further two years in an Atlanta, Georgia prison cell. 

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Economics

Tuesday, April 10, 2007

The Federal Reserve Monopoly over Money Supply / Economics / Money Supply

By: Dr_Ron_Paul

Recently I had the opportunity to question Federal Reserve Chairman Ben Bernanke when he appeared before the congressional Joint Economic committee. The topic that morning was the state of the American economy, and many of my colleagues raised questions about how the Fed might better "regulate" things to ease fears of an economic downturn. The tenor of my colleagues' questions suggested that Mr. Bernanke's job is nothing less than to run the U.S. economy, like some kind of Soviet central planner.

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Commodities

Wednesday, April 04, 2007

Real Investment Returns Are What Count...SO BUY GOLD! / Commodities / Money Supply

By: Richard_J_Greene

There is no shortage of commentary in financial newspapers, hemming and hawing over such matters as GDP growth, or the CPI data, or even the same store sales of major retailers. The fact of the matter is that all such releases are virtually worthless since their unit of measure being reported is in a fluctuating measure that is constantly changing – the US dollar; (or any other paper currency for that matter).

It is akin to weighing yourself on a bathroom scale but allowing the amount of ounces in a pound to constantly fluctuate. What good would that kind of data be to anyone? Yet this is precisely what analysts and commentators debate with constantly in the financial press and on stock market shows such as CNBC.

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Interest-Rates

Wednesday, April 04, 2007

Derivatives Trading Disasters - From LTCM to the 'Ohio Put' in nine years of easy money... / Interest-Rates / Money Supply

By: Adrian_Ash

THIRTEEN YEARS AGO , the giant German industrial conglomerate Metallgesellschaft lost $1.5 billion trading crude oil futures.

It admitted afterwards that it knew little-to-nothing about the oil market.

The next year, in 1995, Barings bank – one of Britain's oldest and most respected financial institutions – went bust thanks to a lone trade in Singapore losing some $860 million on Japanese stock futures.

The head office in London claimed it knew nothing about Nick Leeson's repeated strategy of 'double or quits'.

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Economics

Saturday, March 31, 2007

The Root Cause Of Unemployment Part 2: Real Bills of Exchange and Employment / Economics / Money Supply

By: Professor_Emeritus

A REVISIONIST THEORY AND HISTORY OF MONEY

In Part I we elaborated on the thesis of the German economist Heinrich Rittershausen that the appalling world-wide unemployment of the 1930's was caused by the coercive legal tender laws of 1909. The chain of causation is as follows: the French and German governments, in preparation for the coming war, wanted to concentrate gold in their own coffers. They stopped paying civil servants in gold coin. To make this practice legal they had to enact legislation that gave bank notes legal tender status.

Scarcely did these governments realize that in doing so they set a slow process into motion which, in the end, destroyed the wage fund out of which workers could be paid even before merchandise has been sold to the ultimate consumer. In this second part we examine in greater detail how the wage fund was financed before 1909. We shall see that the bill market is just the clearing system of the gold standard. If disabled, sooner or later the gold standard will collapse as a result.

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Economics

Saturday, March 31, 2007

How the Fed Lost Control of Money Supply / Economics / Money Supply

By: Axel_Merk

The world is awash in money. This money has flown into all asset classes, from stocks to bonds, from real estate to commodities. In a world priced for perfection, should we enjoy the boom or prepare for a bust? Let us listen to Wall Street's adage and "follow the money."

After the tech bubble burst in 2000, policy makers in the U.S. and Asia set a train in motion they have now lost control over. In an effort to preserve U.S. consumer spending, the Federal Reserve (Fed) lowered interest rates; the Administration lowered taxes; and Asian policymakers kept their currencies artificially weak to subsidize exports to American consumers.

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Commodities

Sunday, March 25, 2007

Investing in Gold - A short history of Monetary Mistrust / Commodities / Money Supply

By: Adrian_Ash

What does it take to stop people hoarding gold instead of cash...?

16th SEPT. 1992 – and led by the chancellor in London, Norman Lamont, the Bank of England raised its lending rates from 10% to 12%.

This was the largest hike in 8 years. But the Bank also promised a further increase to 15% later that same day.

Why the sudden urgency? The Old Lady was desperate to defend the Pound Sterling.

Somebody had to.

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Economics

Monday, March 19, 2007

Forbidden Research - Re-emergence of the Gold Standard / Economics / Money Supply

By: Professor_Emeritus

In order to soften the coming blow of a credit collapse, a group of concerned citizens has decided to establish, in the year 2007, the Gold Standard University Live, home for the study of monetary issues placed under taboo by other institutions of higher learning. Here is a partial list of forbidden research topics.

1. What is a gold standard?
A gold standard is a mechanism whereby people exercise their God-given right to create or extinguish money, while denying monopoly power of money-creation to would-be crooks. The individual, if he thinks that money is scarce, or the rate of interest is too high, can do something about it.

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Commodities

Saturday, March 17, 2007

Money Supply, Gold, S&P and the "Safe Haven" Theory / Commodities / Money Supply

By: Adrian_Ash

ACCORDING to the laws of quantum physics, simply watching an event changes the nature of that event itself.

   You'll find the same phenomenon at work on Wall Street, too.

   The more stock brokers follow a stock, the higher it goes. The best PR money can buy comes in the form of "independent" analysis.

   Small-cap stocks suffering "absolute neglect" by professional analysts, for example, can trade at a huge discount to their more research-friendly peers. In the City of London, a study found in 2004, unloved small company stocks were seen to trade 32% lower on a valuation basis!

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Interest-Rates

Friday, March 16, 2007

Money Supply Bubble, Credit Squeeze and A Lender Who Will .... / Interest-Rates / Money Supply

By: Adrian_Ash

"...The bold step in finance - the market-leading decision - now comes by retreating from credit and refusing all risk..."

INNOVATIVE new debt products so ften sound scary.

Credit default swaps, negative amortization mortgages, synthetic collateralized debt obligations...

Doesn't Wall Street ever get its marketing guys to work on these things? You know, just to make them more friendly.

Because the truth is, innovation in finance isn't scary at all. Entrepreneurs and investors should embrace it if they want to get rich. Money loves innovation, and their offspring's called credit.

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Economics

Thursday, January 25, 2007

Parabolic Money Supply Growth - The End of Money / Economics / Money Supply

By: Dr_Martenson

The greatest shortcoming of the human race is our inability to understand the exponential function.
~Dr. Albert Bartlett

While it was operating well, our monetary system was a great system, one that fostered incredible technological innovation and advances in standards of living. But every system has its pros and its cons and our monetary system has a doozy of a flaw.

It is run by humans. 

Oh, wait, that's a valid complaint but not the one I was looking for.

Here it is: Our monetary system must continually expand, forever.

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