Thursday, May 27, 2010
Concerns
Telegraph: US money supply plunges at 1930s pace as Obama eyes fresh stimulus
The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.
Posted by dill @ 12:23 AM (1170 views) Add Comment
7 Comments
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1. drewster said...
Nobody wants to borrow. Individuals, companies, speculators - there's just no demand left at current price levels. We're all Japanese now.
2. dead spider said...
"You could argue that M3 has been going down because people have been taking their money out of accounts to buy stocks, property and other assets," he said. "
If they used the money to buy then the money is still there in other's hands .
Me no understandy .
3. uncle tom said...
The last paragraph holds the key:
"You could argue that M3 has been going down because people have been taking their money out of accounts to buy stocks, property and other assets"
I know from my own observations that the markets for fine wine, fine art and other 'fringe' investments, have gone utterly crazy over the last six months; and it appears that the prime culprits are Americans (and not the Chinese, as some have assumed..)
What goes around, comes around - after the fools have rushed in..!
4. Amos said...
The western world is about to be engulfed with price and debt deflation within 6 months.
5. mander said...
drewster gave the best description of the situation,
Would the Americans come up again with all sort of bad news and movies eventually in order to devalue their dollar considering that the euro is going south?
6. nickb said...
"Mr Congdon said the dominant voices in US policy-making - Nobel laureates Paul Krugman and Joe Stiglitz, as well as Mr Summers and Fed chair Ben Bernanke - are all Keynesians of different stripes who "despise traditional monetary theory and have a religious aversion to any mention of the quantity of money" "
This is confused. Keynesianism has nothing to do with creditism - creditism offers an explanation why Keynesian fiscal stimulus doesn't work if it is financed with borrowing instead of credit creation by the central bank. An explanation why it didn't work in Japan. Duh...
7. alan said...
I watched Michael Moore's "Capitalism - A love story" last week-end.
It looked at US economics and sub-prime and it was enough to encourage me to consider conspiracy theory.
http://www.michaelmoore.com/
Anyone suggesting a $200bn spend in the US, is in line to get an awful lot of commission. Wonder who those big banks might be...?