Sunday, August 5, 2012

M3 MONEY SUPPLY

It certainly feels that way at times. What were they thinking of when they leveraged up the balance sheets in 2007 to 100:1........that's correct.....100:1. Of course the figures varied widely but even many of the conservative figures showed that most of the multinationals had leveraged sheets of at least 40:1. You will never know for certain since the actual balance sheets are NOT to be shown to ANY public forum. That should tell you all you need to know. Factually as noted by one of our commenters last week the M3 money supply statistic was eliminated in 2006. M3 The category of the money supply that includes M2 as well as all large time deposits, institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets.

I include a list from wikipedia below showing a compilation of money supply statistics...


  • M0: The total of all physical currency including coinage. M0 = Federal Reserve Notes + US Notes + Coins. It is not relevant whether the currency is held inside or outside of the private banking system as reserves.
  • MB: The total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed). MB = Coins + US Notes + Federal Reserve Notes + Federal Reserve Deposits
  • M1: The total amount of M0 (cash/coin) outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits
  • M2: M1 + most savings accountsmoney market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
  • MZM: 'Money Zero Maturity' is one of the most popular aggregates in use by the Fed. It is M2 - time deposits + money market funds
  • M3: M2 + all other CDs (large time deposits, institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.
  • M4-: M3 + Commercial Paper
  • M4: M4- + T-Bills (or M3 + Commercial Paper + T-Bills)
  • L: The broadest measure of liquidity that the Federal Reserve no longer tracks. Pretty much M4 + Bankers' Acceptance
  • Money Multiplier: M1 / MB. Currently as of 6/14/2012 it is .85. While a multiplier under one is historically an oddity, this is a reflection of the popularity of M2 over M1 and the massive amount of MB the government has created since 2008.
It should be noted that while the treasury can and does hold cash and a special deposit account at the Fed (fed funds), these assets do not count in any of the aggregates. So in essence paying taxes destroys the money supply. To counter this, the government created the TT&L program in which any receipts above a certain threshold are redeposited in private banks. The idea is that tax receipts won't decrease the amount of reserves in the banking system. The TT&L accounts, while demand deposits, do not count toward M1 or any other aggregate as well.
 Congressman Ron Paul (R-TX) claimed that "M3 is the best description of how quickly the Fed is creating new money and credit. Common sense tells us that a government central bank creating new money out of thin air depreciates the value of each dollar in circulation." Of course if there is no M3 available I suppose the newly created money cannot pose a problem to the system. If you believe that a large black hole exists in the system which was created by over 1.5 Quadrillion in derivatives exposure (that Brooksley Born warned about) then you may understand what the Fed saw in 2005 when they proposed stopping M3. After all, there are people out there that can still apply simple math. Now we have entered the Zombie zone of banking and all of us should be aware that a gaping wound brought about by hubris is still bleeding. Printing will continue. Not only will it continue but it cannot stop. Hold tight with your investments but be aware......the idealogues such as Ann Barnhardt are correct about the system.....it is going to try and take every last morsel it can. Laws mean nothing to these carnivores.....and they are hungry.


19 comments:

  1. 10 day forecast for the heartland is very little chance of drought relief.......gl all

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  2. The Keystone Speculator wrote about Gold today. They wrote that gold generally bottoms in August, but then does well August thru October. However, gold buying is linked to the Indian Wedding season. In India, the monsoon rains are down. The rains are needed for Indian agriculture which then brings in money for gold buying. So, no monsoons, then decreased agriculture, then less money, then less gold buying.
    Pray for rain which will benefit both food and gold.

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    Replies
    1. Doc.......i believe the "Fear" trade will drive gold buying......and the Central Banks buying going forward will be huge.......right now we are in a consolidation pattern designed to drive out as many weak hands as possible

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    2. fear you ask......try this..

      http://www.zerohedge.com/contributed/2012-08-06/why-europe-matters%E2%80%A6-and-how-spain-could-wipe-out-your-401k?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

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  3. For the could'a, would'a, should'a folder.......... Wish I read/knew of the Ann Barnhardt's blog before going all in! She is spot on having the benefit of some hard earned hindsight!

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  4. Look at PPP go! Joe was dead on about this stock. Glad I picked up some months ago! I hope it turns into a 2 or 3 bagger!

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    Replies
    1. I do but wish I bought more! I do own a nice chunk though.

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  5. Standard Chartered Bank news breaking on CNBS.......hehehehe.......this could really blow up....More..."fear"

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  6. I have asked my accountant (35+ years experience) about the safety of 401K or other retirement accounts every year for the last several years. He tells me that his clients are still funding the 401K's. He feels that it would take "anarchy" to wipe them out, and that won't be allowed to happen. Still, I am putting less in each year. Even if they don't get wiped out, I feel increasing taxes will be place upon them when you finally take the money out. The government knows that 401K's are where the money is, and they need it.

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  7. All Italian parties end sooner or later. Great food, lots of wine and a bunch of laughs. Marios party is running of fumes of hopium fumes of money they do not have and will not print. Just wait till Mama Merkle comes home.

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  8. Now where was it again that I buried those mason jars.......

    http://www.governing.com/news/state/mct-california-ciscovers-more-in-untapped-funds.html

    Hehehehehehe

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  9. gold is up 0.39%.....four of my miners are up over 8%......hmmmmmm...and several more are up over 4%

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    1. this is what will get the hedges attn

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  10. Just checked in all green how bout that...... Gonna need quite a few more percentage to see the surface, got an 800 number I'll give um a call!

    Hehehehehe

    Sorry just a bit bored.........

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    Replies
    1. yeh tom ....most trading sites are dead.....sign of the times....gl.....just posted an Ackerman vid

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  11. cup and handle forming on the 2hr SSRI should break out within a couple a days

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  12. i don't think Bart Chilton appreciated my sense of humor this morning

    rom: "Chilton, Bart" Add sender to Contacts
    To: "'kliguy38@yahoo.com'"
    Well, I won't bother you with a response.

    ********************** My message re Silver Manipulation was
    hahahahahahaahahhaahhahahahaha

    ReplyDelete