|
PureBytes Links
Trading Reference Links
|
The Fed under Greenspan runs by very different rules than in previous
periods.
If you remove the cash from the monetary numbers the rate of money
expansion becomes much less. A large portion of the cash printed is now
going abroad as the defacto currency in many locations were currencies
are unstable.
Money may in fact be tight right now.
The money figures on bank reserves, that is what a bank must maintain
inorder to support its deposits, have not risen in two years. That
means by at least one measure money has been tight for the last two
years. This may help explain why gold and other commodity prices are
declining along with the factor of collapse of banking systems in parts
of Asia.
The recent declines of interest rates by the Fed were not by virtue of
leading the way. Un controlled rates like 90day t-bills were selling at
lower rates than fed funds. It is not clear to me at that the Fed
policy is currently accomodative.
Stuart
|