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Tim,
Why do you think long term rates are higher, like double digit?
Kevin
In a message dated 1/3/2008 4:01:21 PM Central Standard Time,
timothymorge@xxxxxxxxxxxxx writes:
My point
here would be that the self proclaimed
savior, Greenspan, realized some
time ago that real
inflation was driven by the expansion of the
broadest
measure of the money supply [m3] and so he
conveniently had the
Fed officially stop publishing
the aggregate M3 numbers. Why? Because then
when the
'massaged' inflation numbers [You would die laughing
if you saw
exactly how the BLS and Treasury officials
actually 'seasonally adjust'
these and all economic
numbers, by the way] come out, they would no
longer
have to explain how M3 could be growing at 8 pct and
their
'officially massaged' CPI number showed 2 pct
inflation.
But never
fear! By law, regional Federal Reserve Banks
MUST report transactions,
money supply growth by all
measures and several other very useful
statistics. So
if you actually take the time to visit ALL the
regional
Federal Reserve Bank web sites one by one,
record the actual M3 numbers
monthly and then do the
simple math, you too can have the real money
supply
number and will have a very good feeling for what
domestic
inflation really is and what is likely to be
6-18 months from now.
I
do not buy the 'domestic inflation' has been lowered
because of
globalization and productivity. I am a pure
monetarist and in my opinion,
price is all that
matters. If M3 is growing at 17 pct, I don't
care
about those explanations--they are fluff
mis-information excuses
put out by the Fed and the
Treasury to help explain their massaged
numbers.
But as I said in an earlier post, this MY opinion. NO
ONE
should take anything I say as the 'truth.'
Instead, look at all of these
statements made by
everyone, especially the government and then do
your
own reading and research. Then make your own decision
about what
makes sense and what seems like hooey.
I can tell you...I have a wife
and a 7 year old and a
9 year old and our grocery bills have more
than
doubled in 2 1/2 years where I live. And we do not
live an lavish
lifestyle. And gas went from $1.25 to
$3.00 on a good. And My insurance
costs have nearly
doubled over the past 3 years. To me, productivity
and
globalization don't change the fact that these numbers
look like I
am facing 20+ pct inflation on an annual
basis already. And just wait until
our current Fed
Chairman starts raising rates...
Tim
Morge
www.marketgeometry.com
--- Jim White
<jwhite43@xxxxxxxxxxxx> wrote:
> Years ago, after the rapid
rise in inflation and
> interest rates put my development company out
of
> business, I developed an equation to forecast
> interest
rates based on the rate of increase in
> money supply and the rate of
increase in GNP.
> I will have to review the formula but I believe
it
> was
> Inflation rate = Rate of money supply growth -
(rate
> of GNP growth + 3%). The effects of surplus money
> supply
are felt as price increases with a lag of
> about 6 months.
>
Today's conditions are somewhat different due to the
> globalization of
business and the rapid rise in
> productivity due to technology and have
resulted in
> a slowing of domestic inflation. Never the less, I
>
believe there will be a reckoning and a return to
> more sustainable
conditions but this time it will be
> world wide.
> Jim
White
> Pivot Research & Trading Co.
>
PivotTrader.com
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