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M3 Money Figures Flash Warning Signs

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http://www.telegraph.co.uk/finance/comment...uble-ahead.html

Yes, the money entrails can mislead. The gurus squabble like Trotskyists. But you ignore the data at your peril.

Tim Congdon from International Monetary Research says that US bank loans have been falling at an annual pace of almost 14pc since early Summer: "There has been nothing like this in the USA since the 1930s."

M3 money has been falling at a 5pc rate; M2 fell by 12pc in August; the Commercial Paper market has shrunk from $1.6 trillion to $1.2 trillion since late May; the Monetary Multiplier at the St Louis Fed is below zero (0.925). In Europe, M3 money has been contracting at a 1pc rate since April.

Private loans have fallen by €111bn since January. Whether you see a credit crunch in Euroland depends where you sit. It is already garrotting Spain. Germany's Mittelstand says it is "a reality", even if not for big companies that issue bonds. The Economy Ministry is drawing up plans for €250bn in state credit, knowing firms will be unable to roll over debts.

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Deflation may be going global:

http://business.timesonline.co.uk/tol/busi...icle6853348.ece

Japan toppled back into the deadly economic trap of long-term deflation today and experts have warned that the trend could blight the world's second largest economy for at least another three years.

August consumer prices plummeted at a record rate of 2.4 per cent compared with a year earlier, adding momentum to a deflationary force that threatens to stifle economic recovery.

The drop, though broadly in line with analyst predictions, prompted several prominent analysts to issue dark predictions of worse to come.

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no matter, Merv can force the reserve balances to be lent by simply sending the BofE's rate (for commercial bank deposits) below zero.

Is that what the Swedish Riksbank is doing? There was a thread about Merv's vist to Sweden.

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Is that what the Swedish Riksbank is doing? There was a thread about Merv's vist to Sweden.

The economists of london are at the BoE today having QE "explained" to them.

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IMO, we will likely get deflation until the current currency is either abandoned or freshly printed money is given to people, rather than the banks. How long they will wait is anyone's guess, but at some point they are bound to decide to "fix it" through debasement/replacement of the currency.

QE in its current form seems to mostly* rely on people wanting and being able to borrow. If they won't or can't the QE money will remain in the banks and prices will fall due to less demand.

*As The Spaniard pointed out the other day, gilts held then sold to the BoE by none-banks would be inflationary.

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QE in its current form seems to mostly* rely on people wanting and being able to borrow. If they won't or can't the QE money will remain in the banks and prices will fall due to less demand.

Banks dont hold QE money within.

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The economists of london are at the BoE today having QE "explained" to them.

didnt you receive your compulsory loan application in the post today?

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See, no one has answered my question.

Truth is, you are all having anxiety over something you do not understand.

Those Quarks you know, they're vibrating and are so far apart it means that all of the Universe, including us, is mostly just nothing! There, worry about that!

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See, no one has answered my question.

Truth is, you are all having anxiety over something you do not understand.

Those Quarks you know, they're vibrating and are so far apart it means that all of the Universe, including us, is mostly just nothing! There, worry about that!

There are two measures in the UK.

M0 and M4.

There is M4 Lending but this is not a measure of monetary liabilities of the banking sector but asset creation. Often causes confusion.

Edited by Alan B'Stard MP

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See, no one has answered my question.

Truth is, you are all having anxiety over something you do not understand.

Those Quarks you know, they're vibrating and are so far apart it means that all of the Universe, including us, is mostly just nothing! There, worry about that!

Actually it is only M42 that you need to comprehend, then you will have reached perfect karma.

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There are two measures in the UK.

M0 and M4.

There is M4 Lending but this is not a measure of monetary liabilities of the banking sector but asset creation. Often causes confusion.

:huh:

So why the feck are we talking about M3?

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Just out of interest, how many 'Ms' are there - I assume there is a M1 and M2 if there is a M3. How high does M goes before it becomes N?

:unsure:

Good question. My guess, based on fook all, is M9

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There are two measures in the UK.

M0 and M4.

There is M4 Lending but this is not a measure of monetary liabilities of the banking sector but asset creation. Often causes confusion.

how many measures of M4 are there?

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:huh:

So why the feck are we talking about M3?

US probably. Not sure the Fed even publishes M3 anymore. Some spooks dream up their own figures I believe - but how they do this without the official bank returns is anyones guess.

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So, um, basically we are having a discussion about something that no one is prepared to admit that they do not understand?

No, no no.

It all becomes clear when you study M42, have faith.

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So, um, basically we are having a discussion about something that no one is prepared to admit that they do not understand?

you are not supposed to understand it. thats banking.

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So, um, basically we are having a discussion about something that no one is prepared to admit that they do not understand?

The european aggregates are produced for our participation in the EU. I believe they can contain foreign currency accounts too.

For GBP - M0 and M4 are the official measurements.

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