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That ain't normal!


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#1 gm_general

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Posted 30 April 2022 - 09:26 PM

I must admit I have not looked at M1 in awhile, but sheesh!

 

https://fred.stlouis...g/series/M1SL#0



#2 Douglas

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Posted 01 May 2022 - 06:33 AM

Adam Smith in his treatise The Wealth of Nations spoke of the Invisible Hand of the markets acting to correct imbalances. What Mr. Smith never anticipated was the Fat Finger of the FED you show in your link.  Granted we have not had a recession since this largess strategy has been supercharged, but to achieve this they robbed Peter to pay Paul and simply pushed problems out into the future.

 

Peter savers and pensioners were deprived of trillions of dollars in earnings over the last decade and Paul zombie and down right stupid companies were propped up all in the name of no recession.  We lived in a Dire Straits Money for Nothing world.  But what Adam knew and the FED clearly doesn't is that you can let the chickens out to cluck around with lax finance if you want, but sooner or later the natural laws of the markets will force them back home to roost.  Welcome to the roosting.  For years now the BLS has fudged, seasonally adjusted, substitutioned, etc. away actual inflation, but now the rate is so great that even these fudgers of the first order can't hide it.  The chickens are here, and it's starting to look more and more like Hitchcock's The Birds.  The pecking is about to commence, and it ain't gonna be pretty.

 

Regards,

Douglas



#3 Rich C

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Posted 01 May 2022 - 09:03 AM

I'm not sure watching M1 is all that useful, but I note the Fed did change the definition of M1 in 2020.  I read the article and I don't make out exactly what happened, but the definition changed.  I just watch the annual budget deficit and total US debt, and you know there is a problem with how we handle our finances.  It looks like we adopted Modern Monetary Theory, but I'm not sure we implemented it correctly.

 

The article below explains the new definition of M1.

 

https://fredblog.stl...1-money-supply/


Blogging at http://RichInvesting.wordpress.com

 

My swing trades typically last a couple of weeks to a couple of months and I focus on SPY.  During the Corona virus bear market I use more sector funds to avoid the bad spots in the SPY such as energy, hotels, and the airlines.


#4 pdx5

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Posted 01 May 2022 - 02:14 PM

Thanks gm_general & Rich C for educating me on M1 with those links.


Edited by pdx5, 01 May 2022 - 02:15 PM.

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