March 24, 2006

March 23, 2006 - The Fed's M3 Money Supply report dies. And nobody cares?


I sure wish Americans would put down the remote control and care about something. Anything. And one thing they (and the world) should care about seems so trivial, but actually is so important.

Yet nobody, no major media of any type, issued an article or report today (google news it - nothing at all).

The Fed as of today is free to oil up the printing presses and print as many dollars as they would like. And you know they will, and you know they have to. M3 is dead. Read this to understand the reporting if it's been awhile since Econ 101. Why did they, after all these years, suddenly stop issuing M3? Because they have to, because they can, and because they thought they could get away with it.

So, with the dollar about to start its long march to worthlessness, today is Day 1, Year 1. And away we go. Your savings, your wealth, your benefits, our deficit, our debt, our ability to pay our debt, bonds, stocks, our trade imbalance, your everyday low prices at Wal-Mart, and your home's value - all are impacted by this.

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).

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

26 comments:

Out at the peak said...

RIP M3.
Hello hyperinflation. :(

keith said...

a lone voice in the wilderness... a congerssman introduced legislation on march 7 to stop this:


IN THE HOUSE OF REPRESENTATIVES

March 7, 2006
Mr. PAUL (for himself and Mr. JONES of North Carolina) introduced the following bill; which was referred to the Committee on Financial Services

A BILL
To require the Board of Governors of the Federal Reserve System to continue to make available to the public on a weekly basis information on the measure of the M3 monetary aggregate, and its components, and for other purposes.


Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Sunshine in Monetary Policy Act'.

bugsy said...

What's all the hubbub bub? The guvmint needs lots of munny. Everyone needs lots of munny. The more munny there is, the richer everyone can get. I like munny, munny is good. More and more munny. Mountains of munny. Ooh! Munny, munny, munny, munny! The more they makes the more I takes. Can't get too much munny. You can never be too rich or have too much munny. I hope they let me have some of that munny! If there's one thing I like, it's munny.

AustinYankee said...

Wipe the crums off your ledge and buy gold and (the love of my life) silver.

Anonymous said...

Me gotz to git sum munny toos.

Anonymous said...

ya haha big joke ...you can have all the paper in the world in your pocket, cause if it turns out the way i suspect it's going to, you can wallpaper your room with it cause it taint going to be worth shit.

bugsy said...

That's a good idea. I think I will paper my walls with Benjis. He is a handsome man, and has a nice smile too. Then I will get me a wheel barrow full of more Benjis and go get me a diet cola to celebrate my good fortune. :-)

Anonymous said...

Ya'll here about the new game called "Monetize My Mortgage"?

Anonymous said...

Most Merikans would identify M3 as either A) a BMW sports sedan or B) a Gillette razor.

Anonymous said...

So if I want to buy gold, how do I know, seriously, that I am getting the gold I bought and not with some mixed stuff in it?

Anonymous said...

Keith,

I'm a new addict to your blog.
Impressive research and humor.
Thanks a lot. I'm learning so much.

As for "I sure wish Americans would put down the remote control and care about something. Anything....
Yet nobody, no major media of any type, issued an article or report today (google news it - nothing at all)."

I won't equate major media with the Americans. I think we've lost that connection a while back.

In a way, it's hard for Americans to care about important issues even if they want to, because the media simply REFUSE (I'm increasingly convinced) to report them. Instead, they feed us a mountain of garbage.

The only way to counter this very "disciplined" media is more vigilance on our part and spreading the news ourselves. So thank you for doing your part. I'll try to do mine (spreading the links).

Anonymous said...

Hi
just came back from Europe. US $ is worthless over there. This is the sad true.

Anonymous said...

Maybe the story hasn't gotten the coverage because it's not that important.

Maybe M2 really does reflect the same data.

Maybe there's not a sweeping conspiracy.

Maybe the simplest explaination is the right one.

Maybe if this blog didn't veer into the realm of Roswell-style paranoia so frequently, more people would take it seriously.

Anonymous said...

Put down the remote??

We now have adults in their 30's and UP, to busy on X box and Play Station to watch any news !
Rather , put down the game paddle or the joystick .
A freakin nuke could be headed right to their roof and they would not have a clue. Hell , who cares , they're playin' Duke Nukem anyway!!

Anonymous said...

FYI - US port security has been outsourced to Hutchison-Whampoa, a company controlled by the Chinese military.

Anonymous said...

M3 was Obsolete, Anyway

M4 or M5 is closer to being accurate. M3 stands for the multiplier effect of money. The old adage was that a dollar spent in the U.S. economy multiplies itself three times.

But we live in an upside-down, Ponzi Game world of real estate flipping and refinancing homes to buy expensive cars, send our kids to college and buy cheap junk made in China. M3 does not quite explain the full hyper-inflationary ramifications of spending thousands of dollars that were never owned by the spender.

Short thesis: When a mortgage is place on a home the borrower is leasing money rather than the property. When the home is valued far in excess of its true value, the borrower just found a way of stealing money by refinancing. Ponzi all over again.

Greenspan is the new Ponzi Game Master. He proved that last year when he urged Americans to use exotic mortgages to buy homes (or play flipper).

Just think about it. Millions of people playing Ponzi or playing 'flip this house.' The mind simply bioggles.

M3 is probably M5 today. That was why Mr. Bubble instructed Helicopter Ben to stop with the M3 numbers.

The Fed ought to publish M5 numbers!

Anonymous said...

Un-believable. No, not the fact that it is a Chinese Company getting hired but that this is another back-door, no-bid contract. Folks, this country ain't worth the paper we're printing. Inflation is waiting quietly in the wings to take off. Real Estate is about to crash hard. The Chinese will want their debts repaid. In short, Chimpy AKA President bush, McFlightsuit's bills are about to come due and you will be paying for it...for the rest of your miserable lives. Chimpy, meanwhile, will probably be spending his remaining days hanging with Michael Jackson in DubaiLand. I predict there will be international warrants out for his arrest as a war criminal (and rightfully so).

Me? I'm selling off my US real estate, moving funds into foreign currencies, researching heavily where ON EARTH I can go that will be upwind from the fallout - literal and figurative - that this cabal of thieves will leave behind. There never was anything "great" about this country. Really. Just because its where you were born doesn't make it so. Just because Jesus tells you its wonderful doesn't make it so. Just because they MADE YOU swear allegiance to the flag doesn't mean you have to believe it. Open your own eyes and look around. This country was founded on corporate greed. The "Haves" have always been in control and any semblance of "freedoms" they've extended was merely a tool to get you to shut the hell up and get back to work. They eviscerate the educational system because educated people are impossible to control. They'd much rather you got your science from Pat Robertson.

Patriotism is a disease. And, this country is a cancer on the planet. Our environmental policies? Ruining the atmosphere faster than anyone could imagine. Our corporate culture? Putting seven year olds to work for 18 hour days in little child labor camps all over SE Asia so Wal-Mart can have cheap sneakers to sell. Addiction to oil? Our children are dying everyday for a war that should have never been fought.

Mission Accomplished? I think so. They've ruined it all.

I'm getting out while I still can. I don't like the sound that jackboots make on the street in front of my house. I certainly don't like contributing my tax dollars to a regime destined to destroy mankind.

Nathan said...

Anon-

Bye-bye, so long and farewell. I didn't know M3 meant so much to you.

JUST FOR THE RECORD, if the Fed starts printing money it'll show up in M1 (the most direct measure of currency in circulation). So no need to get all worked up, and if it is all some sort of conspiracy to secretly hyperinflate the hell out of the US dollar, then chances are M1, M2 M3, etc are all useless, because its a conspiracy.

Anonymous said...

Anon: Good riddance. Why not move to France. You can join right in with them.

I suggest renouncing your US citizenship as soon as you hit the other side. Destroy the passport. Change your name if that makes you happier as it probably sounds "American" and you do not want to expose your shameful past.

Anonymous said...

I agree. Your rant against America is retarded. Having lived around the world, I can tell you without exaggeration that there is NO PLACE with more freedom than the U.S. NO PLACE. In Germany, we had to close our drapes at sundown every evening. This was the law. In England, we had to pay for a license to watch broadcast television. In Italy, if you own a house you don't live in, the government can more another family into it. Tough luck. Virtually every country in the world, except for the U.S., has censorship. Even Canada regulates which television programs can or can't be broadcast into the country, bans satellite dishes, and has outlandish hate speech laws rivaling some of our most narrow-minded PC campuses.

There is no where else you can go where your rights are guaranteed. There is no Constitution in the UK. Only in the terrible U.S. do you have guaranteed constitutional liberties that for the most part have expanded and expanded with time. Why do you think MILLIONS of foreigners move here, legally or otherwise, every year?

Instead of condemning everything and everyone, why don't you thank your lucky stars, the gods, or whomever for your incredible good fortune to live here, and not in some country with government by committee?

What you think about increases. If you concentrate on everything bad or that you think is bad, you are going to experience more and more of it. That the Law of Attraction. Bummer.

Please keep in mind that the U.S. has saved the world twice (WWI and WWII). The world that damns us and bitches about us, should be ashamed.

"I'm getting out while I still can. I don't like the sound that jackboots make on the street in front of my house. I certainly don't like contributing my tax dollars to a regime destined to destroy mankind."

It is only because of the U.S. that you and the rest of Western world don't really have jackboots to contend with. Hitler ALMOST won--how quickly we forget. Who do you think liberated the concentration camps? The French? The Italians? The Chinese?

Forgive me for getting grouchy, but you have no idea what you're talking about. You sound like a spoiled nineteen year old who has never had to fight for any kind of freedom.

Have a nice trip. Please don't come back.

theREcrashwillsaveme said...

Ah come on guys, Anons' post is very gloomy to be sure, in the extreme. But you have to admit there is a grain of truth in every point he made.

He's just taken it to the extreme gloom-full end where it becomes immobilizing and makes you bitter.

I feel for you Anon. You seem pretty smart. Hope someday you'll get just the touch of cheer you need to mobilize and make a difference.

You are right: the American education system stinks. It's a crying shame.

Anonymous said...

agreed. I'm broke, but live better than a Roman Emperor. Try to find a bathroom in a megacity slum at 4:oo in the morning. Earning a living to pay a street gang for a stall on the sidewalk in Mexico city. Living on less than Two dollars a day in Africa.

Anonymous said...

theREcrashwillsaveme said...

:Ah come on guys, Anons' post is very gloomy to be sure, in the extreme. But you have to admit there is a grain of truth in every point he made.

"He's just taken it to the extreme gloom-full end where it becomes immobilizing and makes you bitter."

Possibly, but someone who had actually experienced political oppression wouldn't make such ridiculous statements.

Of course there are horrible people and politicians here, and bullies of all stripes, but those exist everywhere, and often in far greater percentages in foreign countries that do not have constitutions.

Humanitarians who focus on alleviating the suffering of others tend to be far more cheerful than individuals who focus on their own unhappy circumstances. There is no where to escape on this planet, so one might as well make the best of what one has.

To say that "Patriotism is a disease. And, this country is a cancer on the planet" is simply stupid and untrue. This country is the only thing that has kept the planet going for the last eighty years, and patriotism is the same thing as loving ones immediate family above a strange family on the other side of town. Hundreds of thousands of Americans have died defending freedom around the globe, often in countries where their sacrifices are now barely acknowledged and commonly repaid with contempt (France, for example). No other nation in history has done as much for mankind as has the United States, and anyone who denies this is a fool living in a fantasy.

Requiem said...

It is only because of the U.S. that you and the rest of Western world don't really have jackboots to contend with. Hitler ALMOST won--how quickly we forget.


Just wanted to comment, since I was in Eastern Europe last summer. The US didn't save the world because it beat Hitler, but because it contained Stalin. Don't forget that we were only fighting a small fraction of the German Army; most of it was being fed into the Russian meatgrinder.

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