8 replies to this topic

[Mr Dev]

Gonna be hard to fight that stuff....as its pushed the markets higher for the last couple of years... This week is big,... maybe they want to push it up for a FEEL GOOD HOLIDAY WEEK next. It is getting ridiculous...if you ask me ...I'll reserve the rest of my thoughts for later..

[Tor]

i agree, the money supply is crazy. thanks ben for that. i noticed however it hasnt yet spilled over into the gold arena and would have expected it to show up there at least.

[fib_1618]

i noticed however it hasnt yet spilled over into the gold arena and would have expected it to show up there at least.

Excess liquidity only finds a home with gold when all of the other asset classes are perceived "fully valued" and need somewhere else to park while it waits for additional clarity.

And as far as Ben is concerned, he and his colleagues haven't had much to do with the equity price action for over a year now....we're just snowballing.

Fib

[arbman]

I agree Fib, the last time the Fed and the treasury injected aggressively any money was last fall though. It is just enough to look at the chart of the USD, pretty much. They did help collaterize the sub-prime problems this spring, even though they did not directly inject any money into the money supply, I think there has been some longer term aggreements out of the SOMA to manage the debt crisis. SOMA did not shrink... I firmly believe that the debt crisis is still growing in United States. The builders retreated earlier as the growth component and now the REITs are retreating as the value component. The biggest and probably most important hard asset in United States, REITs, is not a basis for collateral anymore. This must be a genuine monatery correction in the bond market and it did not effect the entire business environment yet. There are still companies out there who can yield more money than the relatively high interest rates. The gov't can not help to collaterize all of these debt problems into the future, so it is either a recession or it will push the long term rates much higher eventually... What do you think? - kisa

[pdx5]

No kidding, the Fed added almost $100 Billion in the last 4 days! However this money is "loans" to be repaid. Loans are wonderful when business can make more profits than the interest on loans. It allows them to make money they could'nt have made without available liquidity. But it is a double edged sword, in that if economy has a hiccup, the loss of profit + interest can kill you.

[btrade]

No kidding, the Fed added almost $100 Billion in the last 4 days!
However this money is "loans" to be repaid. Loans are wonderful
when business can make more profits than the interest on loans.
It allows them to make money they could'nt have made without
available liquidity.

But it is a double edged sword, in that if economy has a hiccup,
the loss of profit + interest can kill you.

Where do you get that informtion?

[SandStorm]

LOL. What liquidity? There was a net drain of $500 mil today. 3.75b matured from Fed's portfolio against 3.25b repo. And you got more maturing coming next Monday and Tuesday.

Edited by SandStorm, 29 June 2007 - 04:33 PM.

[pdx5]

Where do you get that informtion?

From the Bull & Bear website, under "Fed Money Pump"

Good trading!

[spielchekr]

More moisturizer please.

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