Oyster report

[Hiding Bear]

Thanks Vesselin and Oyster.

 

 

Hiding Bear posted M3 showing a turn down; Doc has shown in his work that there is less Fed pumping than is popularly believed.

 

Supporting HB Rate of change in M3 shows some pumping (w/recent trending down) but not an unprecedented amt. Doc notes that the Fed is not behind this in any case

 

http://www.economagic.com/em-cgi/charter.e...3sl+1990+0000+1

 

However M3 velocity, while at a local maxima, is relatively and extremely low-

http://www.economagic.com/em-cgi/charter.e.../vel-gdp-per-m3

(Velocity a big issue in 1930s depression BTW....)

 

I know little about this but can it be that relatively low velocity indicates impending deflationary forces - in spite of recent increase in M3? this would seem to fit w/Oysters call for lower gold prices

 

 

TIA

The Fed is playing a double game here. Not only talking about raising rates this time but actually following the market - which is already tightening - up. The Japanese bond market fell for its 12th day in a row today.

 

The funny thing is while the Fed lets the Fed Fund rate rise, it will at the same time start a quantitive easing (increasing the monetary base) soon (if not already).

 

The monetary base increased last week while money supply measures fell. I expect more of the same for the next few weeks until the real panic begins. The panic being the realization that the housing bubble-credit machine has stopped working (see Doc's reports) and money supply is slowly consumed to pay off exisiting debts. Add in the rise in energy costs which are forcing a reduction in non-energy spending a you have a receipe for an economic slowdown.