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Here's a timely article on the subject, including a discussion of
Bernanke's new Term Auction Facilities.
The article includes a rather telling chart showing bank borrowings
from the Fed over the Fed's history. Mr. Bernanke is certainly
breaking new ground here.
http://www.mises.org/story/2905
From: Charles Meyer <chaze@xxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx
Date: Sunday, March 2, 2008, 9:35:48 AM
Subject: [RT] m2 monet supply
Earl-
Was it a casual coorelation; or psychological? I have
often heard the theories that say
it was the Fed that acutally CAUSED the Great Depression.
Also, that the reason we
eventually emerged from the 30's debacle was because of
the natural ebb and flow of the
business cycle. The following like provides more than
anyone probably wants to know
about this subject.
http://forums.somethingawful.com/showthread.php?threadid=2785590&pagenumber=1
Chas
----
On Sun, 2 Mar 2008 08:24:14 -0700
"EAdamy" <eadamy@xxxxxxxxxxxx> wrote:
> 1) Employment in India may slow down due to lower global
>demand but take a
> hard look at what India is spending on infrastructure.
>If anything, I would
> expect infrastructure spending in both India and China
>to strengthen to
> offset employment declines in other sectors. This is
>what governments do.
> This is how FDR drove the US out of depression.
>
> 2) What is hardest to determine in the futures markets
>is what is real
> supply/demand and what is speculators. It seems to me
>that every strong
> market eventually attracts the hot money, the hot money
>takes the market
> parabolic, then the market crashes back to
>supply/demand. I think this is
> generally true in the commodities markets, especially so
>now in grains. On a
> fundamental basis, GM seeds have been developed which
>tolerate drought and
> produce 5% more, other GM seeds have been developed
>which produce 10-15%
> more by increasing nitrogen uptake, farming technology
>(computers, mapping,
> GPS drives) is greatly increasing production per acre in
>OECD countries, and
> more acreage globally is being put into agriculture.
>
> Earl
>
> _____
>
>From: realtraders@xxxxxxxxxxxxxxx
>[mailto:realtraders@xxxxxxxxxxxxxxx] On
> Behalf Of Rakesh Kumaar Sahgal
> Sent: Saturday, March 01, 2008 6:50 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: RE: [RT] m2 monet supply
>
>
>
> The latent demand was always there in India because of
>our demographics and
> I guess that would be the case with China too.
>
> Insofar as we in India go, this demand was actualised by
>[a]
> moderation/rationalisation of the taxation structures
>and [b] in my opinion
> to an even larger extent by opening up of the economy to
>global
> participation both in the financial sector and the real
>economy. Once the
> latter development started happening ( i.e. global
>participation ) in a
> substantive manner and incomes of people started rising
>did consumption
> start picking up. As the global economy contracts how
>much of a slowdown
> will that cause in India is not known, but a slowdown is
>quite likely. Even
> the finance minister conceded his apprehensions on this
>score in an
> interview after presenting the budget for the year. So
>that should to an
> extent cause some degree of moderation in global
>commodity prices. I hope
> this is not a case of hoping against hope. Also if as
>the charts suggest
> coupon rates are set to travel northwards on a secular
>basis and the era of
> easy money is over, how long will the speculative binge
>in commodities
> continue? I know commodity futures have been traded for
>very long but if
> someone has the data and can do a correlation study on
>commodity futures and
> interest rates it will be most instructive to see the
>results.
>
>
> Rakesh
>
>
> EAdamy <eadamy@xxxxxxxxxxxx> wrote:
>
>
> My point is that M2 and M3 (about which there are more
>conspiracy theories
> than I can shake a stick at) are not reflecting what is
>going on in the real
> world of credit. It's like using the oil gauge to
>determine how fast you are
> going. Inflation is not, repeat not, being driven by
>money growth. Money and
> liquidity are contracting and that gauge says we should
>have deflation.
> Inflation is being driven by demand growth, and to a
>lesser degree by
> commodity speculation. Quite simply, there is more
>demand for corn, wheat,
> beans, copper, oil, gas, iron ore, and so forth than
>there is available
> supply.
>
> Only 19% of China's GDP comes from exports ... the rest
>is internal
> consumption. That is huge. Similar story for India.
>These economies will
> slow down when the US/Europe slows but they are going to
>keep on growing due
> to internal growth and consumption. Food, energy,
>commodity inflation is not
> going away. Labor costs in China (and India) are rising
>and China is doing
> less to subsidize exports by removing tax breaks. We are
>at the end of the
> line in importing product deflation from China. We are
>competing with China,
> India and other emerging markets for virtually all
>commodities and that is
> not goig away.
>
> Earl
>
> _____
>
>From: realtraders@xxxxxxxxxxxxxxx
>[mailto:realtraders@xxxxxxxxxxxxxxx] On
> Behalf Of Charles Meyer
> Sent: Saturday, March 01, 2008 4:52 PM
> To: realtraders@xxxxxxxxxxxxxxx
> Subject: Re: [RT] m2 monet supply
>
>
> John Mauldin is claiming that a lot of commodity
>inflation
> is due to
> the production of ethenol, whereby corn is being
> subsidized. I
> wonder what M3 is estimated to be; maybe 11-12% growth?
>
> chas
> -----
>
> On Sat, 1 Mar 2008 16:40:04 -0700
> "EAdamy" <eadamy@xxxxxxxxx
><mailto:eadamy%40valornet.com> com> wrote:
>> I'm not expert on money supply but my understanding is
>>that M2 is being
>> driven by relentless flow of funds into money market. A
>>strong argument can
>> be made that we are undergoing the greatest credit and
>>lending contraction
>> since the great depression. Banks are in constant fear
>>of violating reserve
>> requirements as their assets become impaired so they
>>minimize lending.
>> Investment banks are in similar situation. Consumers are
>>now reducing debt,
>> not adding. Fed is pushing on a string lowering rates
>>trying to get everyone
>> to borrow again but it is not working because of asset
>>quality issues. This
>> is not going to change anytime soon.
>>
>> Inflation is being driven by food, energy, declining
>>dollar, and inflation
>> in China, not by expansion of the money supply.
>>
>> Earl
>>
>> -----Original Message-----
>>From: realtraders@ <mailto:realtraders%40yahoogroups.com>
>>yahoogroups.com
>>[mailto:realtraders@
>><mailto:realtraders%40yahoogroups.com>
> yahoogroups.com] On
>> Behalf Of Ben
>> Sent: Saturday, March 01, 2008 3:41 PM
>> To: realtraders@ <mailto:realtraders%40yahoogroups.com>
>>yahoogroups.com
>> Cc: TimeandCycles@
>><mailto:TimeandCycles%40yahoogroups.com>
> yahoogroups.com; vincenn
>> Subject: [RT] m2 monet supply
>>
>> I gues fed is REALLY afraid here
>> look at last 8 weeks or m2
>> Money Supply
>>
>> The chart below has bee provided by Gordon Harms.
>>
>> M2 has moved above its already elevated growth rate of
>>the past year
>>
>> No virus found in this outgoing message
>> Checked by PC Tools AntiVirus (4.0.0.25 - 10.063.001).
>> http://www.pctools.
>><http://www.pctools.com/free-antivirus/>
> com/free-antivirus/
>>
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