Posted: Wed Jun 23, 2004 9:20 am Post subject: Federal Reserve doesnt know how to handle high energy prices
Funny that we are talking about interest rates on another thread. I just saw this article on Bloomberg.com about the Fed and European Central Bank and how they each deal with the threat of high energy prices: Bloomberg
A few quotes:
Oil shocks are, in a word, stagflationary: On the one hand, they can increase prices throughout the economy, hastening inflation and justifying tighter monetary policy; on the other hand, they can clamp down on consumer spending, damp growth and provide a rationale for monetary easing. Earlier this month, Fed Chairman Alan Greenspan raised eyebrows about oil prices driving inflation concerns when he said ``the persistence of the rise in energy prices is a worrisome element in the cost picture.'' First, while some analysts point out that investments in conservation and a growing knowledge sector have made our economy less energy-dependent -- energy consumption per dollar of real gross domestic product has fallen 46 percent since 1973 -- that only tells part of the story.
Oil-Dependant
Over the same period, we have also become far more dependent on foreign sources of oil, which means profits from price increases are siphoned off by foreign producers, not recycled back into the American economy. Goldman Sachs Group Inc. estimates that net oil imports have actually risen as a percentage of GDP from 0.9 percent in 1970 to 1.2 percent in 2003, suggesting the impact of oil prices on U.S. real income is, if anything, slightly higher than in 1970.
Posted: Fri Nov 11, 2005 1:28 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
I did some research and put my dedective hat on.
One of the two key differences between M3 and M1 & M2 is that M3 includes Eurodollar deposits. Eurodollars are deposits denominated in United States dollar at banks outside the United States.
The M3 Stat will end be published near the end of March, 2006.
The Asia Times Online has reported "Iran has recently announced that the new oil exchange will start up its computers in March 2006".
If Iran goes through with the oil exchanged priced in Euros, foreign banks will be dumping USD$ for Euros. This should make the M3 trend line drop like a rock.
My guess is that someone does not want the investing public to know this (both foreign and domestic).
Posted: Fri Nov 11, 2005 1:57 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
more to it that just that...........
if you are pumping liquidity into the system and you need to pull some of it out to prevent hyperinflation, then without M3, you can hide it away now in offshore accounts for later use, or just scrub it altogether.
it's a scandle what the fed have done to money.
did you know that the fed buy US gov. treasuries, which basically amounts to shill bidding on the gov. auctions for treasuries.
there is so much deceipt going on, they have got away with it thus far, why not just stop publishing the details altogether.
the whole terrorism thing is obviously more about people control, far more than it is really about any real terrorism. after all a few guys running about the US after 911 letting off car bombs in every major city, could have brought the country to it's knees, but there was no real follow up ??
why not ??
after such a major attack it would have only taken a couple of dozen smaller ones over the next few weeks to have the whole US in an absolute mess.
there is obviously an adgenda being played out that requires more stringent controls over peoples activities and now that any person could be arrested and branded as a terrorist and held without trial for weeks and weeks, we are entering a situation not unlike communist russia where any opposition to the status quo can simply be branded and locked up.
terrorist or political prisioner ? the dividing line is pretty close ?
the situation of a debased currency has now been running for 30+ years and the governments obviously realise that crunch time is coming and once the people realise that their money is simply pieces of paper, that are basically worthless and based only on a trust that has been absolutely violated, then the governments realise the need to contorl and hide things more and more.
a dollar bill or british pound or euro is really worth no more than a piece of white paper that I write a value on with a biro, and a bank account is worth nothing more than an account on a server with some zeros in it.
the value of the paper money is meaningless without something concrete behind it.
Posted: Fri Nov 11, 2005 5:23 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
dbarberic wrote:
I did some research and put my dedective hat on.
One of the two key differences between M3 and M1 & M2 is that M3 includes Eurodollar deposits. Eurodollars are deposits denominated in United States dollar at banks outside the United States.
The M3 Stat will end be published near the end of March, 2006.
The Asia Times Online has reported "Iran has recently announced that the new oil exchange will start up its computers in March 2006".
If Iran goes through with the oil exchanged priced in Euros, foreign banks will be dumping USD$ for Euros. This should make the M3 trend line drop like a rock.
My guess is that someone does not want the investing public to know this (both foreign and domestic).
So what does that mean exactly to a neophyte?
Inflation? Hyperinflation? Devaluation of the dollar? Destruction of the 'Petrodollar'? What?
(I don't even know what this M1, M2, and M3 line business is about..? Wikipedia isn't very helpful to someone who hasn't taken Macroeconomics... and it also doesn't tell me what happens when these lines fall like a rock...)
Posted: Fri Nov 11, 2005 6:29 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
OMG- I think somethings up and I'm NOT a doomer!
M3 has declined for the last 3 months at a rate not seen before, couple that with the unprecedented failure of last weeks 10 yr. t-bill auction to attract bidders means that the FEd is getting ready to MASSIVELY increase M3 and with no published figures it will make it easier to disguise the new funny money's journey from the printing press to the bond markets.
Posted: Fri Nov 11, 2005 6:36 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
Got Gold?
History has shown that Americans prefure to pay for their wars through (cranking up the printing press)/inflation rather then taxes. And since we'll be in a state of perpetual warfare from now until bankruptcy you can bet your last dollar it'll be worth less in the future.
Posted: Fri Nov 11, 2005 7:37 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
UIUCstudent01 wrote:
(I don't even know what this M1, M2, and M3 line business is about..? Wikipedia isn't very helpful to someone who hasn't taken Macroeconomics... and it also doesn't tell me what happens when these lines fall like a rock...)
Montequest wrote:
As to M1, M2, M3:
M1: Technically defined this is the sum of: the tender that is held outside banks, travelers checks, checking accounts (but not demand deposits), minus the amount of money in the Federal Reserve float.
M2: The sum of: M1, savings deposits (this would include money market accounts from which no checks can be written), small denomination time deposits (where small is less than $100,000), retirement accounts.
M3: M2 plus the large time deposits (for any of you with more than $100,000 deposits you add to this...). Eurodollar deposits, dollars held at foreign offices of U.S. banks, and institutional money market funds.
_________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Joined: Jan 31, 2005 Posts: 451 Location: Massachusetts
Posted: Fri Nov 11, 2005 7:38 pm Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
UIUCstudent01 wrote:
So what does that mean exactly to a neophyte?
Inflation? Hyperinflation? Devaluation of the dollar? Destruction of the 'Petrodollar'? What?
(I don't even know what this M1, M2, and M3 line business is about.)
M1, M2, and M3 are measures of the quantity of money, in this case dollars. The measures each include different categories of money. M1 is the most restrictive; M3 is the most inclusive. M3 includes offshore dollar deposits (AKA eurodollars). Petrodollars are just eurodollars held by oil producers.
There are two definitions for inflation. The one the layman is most familiar with is an increase in prices. Another definition is an increase in the money supply in excess of the real increase in the size of the economy (which tends to raise prices, either of assets such as real estate or of consumer goods). Hyperinflation is just when inflation spirals out of control, like in Germany in the 1920s, when housewives pushed shopping carts full of paper money to the bakery to buy a loaf of bread.
The idea here is that the Federal Reserve Bank is suppressing the M3 measure of money because they want to conceal sharp changes in the number of dollars held overseas, for example if foreign central banks start dumping their dollar reserves, which they might do as a result of the following developments, among others:
1) The US economy slides into recession by spring of 2006, the Fed lowers interest rates sharply, and the value of the dollar drops sharply against other currencies (since people are holding dollars mainly because they can get a better interest rate in the US than in most other countries with apparently sound banking systems).
2) Iran opens its oil bourse, where people can buy and sell gold in euros, and it is such a success that foreign central banks no longer see a need to hold dollars to safeguard their ability to import oil.
The combination of 1) and 2) would be particularly disastrous for the dollar.
The result would be sharply rising import prices in the US (sharply rising prices in general) and probably recession. The likely Fed response would be to print money in an attempt to push the US out of recession. This, however, would be likely only to make matters worse and could lead to hyperinflation.
Or, the Fed foresees recession and plans to print money by buying US government debt (Treasury notes), which would force down interest rates in an effort to get US consumers to take on more debt. This would sustain the consumption of imports and the trade deficit, which would send MORE dollars overseas, dramatically increasing M3. This outcome would also mean inflation, but it would manifest itself mainly in further asset bubbles (a revival of the real estate and stock market bubbles, mainly).
I believe that this strategy would fail either because consumers will no longer be solvent and able to take on more debt after this winter's shocks to their budgets, or, if enough do remain solvent, because this strategy will boost economic activity in both the US and the many countries that export to the US, which will again push up the price of oil to the point where US consumers are no longer solvent.
However, the bankers at the Fed seem to be masters of wishful thinking, and they figure that if they can keep the public from knowing about alarming developments in the money supply, they will be able to keep the party going at least long enough for the big players to buy up gold or other real assets, leaving ordinary consumers, and probably countries that rely on the US consumer market (e.g. China), to deal with the wreckage.
Why? Why now? How can hiding this data help their cause?
Interesting! But, notice the date:
Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.
Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).
The date is 3 days after the Iranian Oil Bourse becomes a reality. Is there a connection? Is this meant to try and prevent a collapse of the dollar in the days following the switch to the euro as Iran's oil currency? The timing is more then just coincidental.
Notice the inclusion of the Eurodollar. Now, for those not familiar with this term, it is not the same as the euro even though some erroneously call the euro a euro dollar. The Eurodollar is an American dollar held by a foreign institution outside the U.S., usually a bank in Europe, often as a result of payments made to overseas companies for merchandise.
Posted: Sat Nov 12, 2005 8:26 am Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
Does anyone know how long the M3 stat has been published?
I think it is for decades. How can you have an economic statistic that has been published for decades simply decided that it will no longer be published? Something is really funny here.
Joined: Sep 06, 2004 Posts: 5315 Location: Smalltown New Zealand
Posted: Sat Nov 12, 2005 8:34 am Post subject: Re: Federal Reserve will NO LONGER publish M3 data!
The Enronification of the US is nearly complete. _________________ "Complex problems have simple, easy to understand, wrong answers." - Henry Louis Mencken
All times are GMT - 6 Hours Goto page 1, 2, 3 ... 14, 15, 16Next
Page 1 of 16
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
