9 replies to this topic

[James Quillian]

I am not saying that growth in M3 has no effect on the stock market. I will say that the Federal Reserve has no direct way to change M3. Changing lowering reseve requirements does indirectly encourage the growth of M3. Anyone who claims the Fed is pumping M3 should point out the corresponding reductions in reserve requirements. I think a lot of the articles about M3 are misleading. M3 represents money that has already been invested. It must be converted into M1 before it can be spent, invested ior reinvested. M3 has more in common with margin debt, which is also close to a record level, than it does with cash. The only way I can think of that the Federal Reserve could directly pump the stock market is to require certain dealer firms to invest directly in equities in return for the Fed's buying treasury securities from them. Of course, any central bank including our Federal Reserve can buy equities directly. The last two things are possible but M3 is not involved in any way. James M0: The total of all physical currency, plus accounts at the central bank which can be exchanged for physical currency. M1: M0 + the amount in demand accounts ("checking" or "current" accounts). M2: M1 + most savings accounts, money market accounts, and certificate of deposit accounts (CDs) of under $100,000. M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements.

[endisnear]

Quillan, thks for your input. what is your aluminum hat take on nonpublishing of M3 numbers since March 06? I'll be moving to your neck of the woods by Med Center in 2-3 wks from Houston....love San Antonio!!

[James Quillian]

Quillan,
thks for your input. what is your aluminum hat take on nonpublishing of M3 numbers since March 06?

I'll be moving to your neck of the woods by Med Center in 2-3 wks from Houston....love San Antonio!!

I have somewhat of a reputation as a conspiracy kook. But, I still can't accept every unusual event as being part of as conspiracy.

Until, someone explains how the Fed is messing with M3, I have to view their reasons for not publishing the numbers in line with their explanation.

IMO market manipulation efforts are not going to be done in the framework of an official capacity.

James

[Chilidawgz]

IMO market manipulation efforts are not going to be done in the framework of an official capacity.

Sometimes the elephants in the middle of the room aren't seen they are so large

[spielchekr]

Once in awhile, creating the illusion of conspiracy... is the conspiracy.

[Data]

"I will say that the Federal Reserve has no direct way to change M3." By definition, since the M3 measure includes the repurchase agreements, the Federal Reserve can and does affect the M3 money supply. The M3 measure does not include the Treasury repos which are often larger in quantity than the funds injected by the Federal Reserve.

Edited by Data, 27 December 2006 - 09:50 AM.

[James Quillian]

"I will say that the Federal Reserve has no direct way to change M3."

By definition, since the M3 measure includes the repurchase agreements,
the Federal Reserve can and does affect the M3 money supply.

The M3 measure does not include the Treasury repos which are often
larger in quantity than the funds injected by the Federal Reserve.

The money supply is increased by the amount of M1 that the Fed uses to buy the Repo.

The dealer gets the M1.

James

[traderpaul]

Took this chart fron Chili.....The growth of M3 has nothing to do with the market.....Show me the correlation please.....One thought on this chart.....Is it showing the real inflation?

Edited by traderpaul, 27 December 2006 - 12:26 PM.

[Data]

The funds go to the primary dealer's reserve account. This is captured in the M3 in the repurchase agreements accounts. M3 also captured the growth in monies from foreign central banks held for purchase of US securities.

[Chilidawgz]

Richard Russell always makes me smile:

"I get a kick out of all these central bank governors, both here and overseas, constantly warning us about the "terrible danger of inflation." What a bunch of snake-oil salesmen these guys are. It's the central banks, themselves, who are pumping out all that extra fiat money that is creating the inflation. It's like an AIDS carrier indulging in all the sex he can handle while simultaneously warning about the spread of the disease.

So what's it all about with these central bankers? Simple, they like their cushy jobs along with the perks, and the only thing they're worried about is that the world will get wise to the central bank/fiat money racket, and maybe kill the beast. In other words, the central banks are afraid that voters will finally move to get rid of the whole private money business along with its nonstop production of intrinsically worthless fiat money.

You see, a real headwind of inflation would anger the public, in which case a few intelligent journalists might start putting the blame where it belongs -- on the central banks, not the least of which is our own Federal Reserve. No, too much inflation, surging inflation, would be dangerous -- it might expose the Fed and the central banks for what they are -- engines of inflation. When you've got a great racket going, like taking control of a nation's money, you want to protect that racket.

So it's no wonder that the governors of our Federal Reserve take turns "warning us" about inflation while simultaneously telling us that "they'll keep everything under control." It's enough to cause this old editor to "throw up his cookies." The curse of the Fed -- it keeps going on and on and on. These freebooters know how to protect their racket. Create inflation, hide the evidence (as they did when they hid the figures on the broad M-3 money supply) and then bravely act as our "protectors and saviors.". Where was Congress when the Federal Reserve was first approved in 1913? Answer -- At the same place is was when Congress handed over to President Bush the power to make war. End of Russell rant. Whew! "







If I recall correctly, during the Weimar Republic inflation, their stocks went up also: History doesn't repeat but it rhymes?

Edited by Chilidawgz, 27 December 2006 - 11:28 PM.