This page has been archived and commenting is disabled.

M2 Grows By $40 Billion In One Week, Hits Fresh All Time High

Tyler Durden's picture


Just in case someone was confused about the relationship between liquidity, currency devaluation and nominal (not real) asset prices, the St. Louis Fed was kind enough to email us their weekly M2 level. And after last week's surprising drop, M2 once again rose, this time by a whopping $40 billion. Oh and before someone says that M3 is still declining, it isn't. Or rather the much more important monetary aggregate, that including all shadow banking liabilities is now increasing as we indicated during the last Z.1 spread. In one month, when the next Flow of Funds report is released we are confident we will confirm that in Q4 shadow banking increased by at least half a few hundred billion on an annualized basis. In other words the central bank reliquification is now on in full force, both in America and in every other place that has central banks. Which also explains why central banking hawks are now virtually extinct (cf: Axel Weber).


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/11/2011 - 17:37 | 954206 Roy Bush
Roy Bush's picture


Fri, 02/11/2011 - 17:40 | 954212 hambone
hambone's picture

No wayyyyy....that's exactly what I was gonna post.  WEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEEE

We're rich...we're rich...weeee

OT - I'm fucking losing my mind

Fri, 02/11/2011 - 23:37 | 955084 flacon
flacon's picture


Fri, 02/11/2011 - 18:07 | 954309 Roy Bush
Roy Bush's picture

No, no...You have it wrong.  You have to put it in the context of the purchasing power of the average American in the very near future.  It's a different kind of WEEEEEEEE!

Fri, 02/11/2011 - 18:29 | 954371 buzzsaw99
buzzsaw99's picture

Do you hear it? Banjo music.

Fri, 02/11/2011 - 17:39 | 954209 FaithEqualsZero
FaithEqualsZero's picture

I'm still waiting for my Obummer bux!

Fri, 02/11/2011 - 17:51 | 954251 whatsinaname
whatsinaname's picture

Pity the central banker for India - at rate that Fed is going, the 47.1 % CPI food component will be like harakiri for Indian RBI chief.

Fri, 02/11/2011 - 17:53 | 954259 Spaceman Spiff
Spaceman Spiff's picture

I say we go with an 'Idiocracy' dollar....   Back it with a basket of goods consisting of french fries, mountain dew, porn, and burrito coverings.



Fri, 02/11/2011 - 18:08 | 954311 topcallingtroll
topcallingtroll's picture

Frito Pendejo...the most politically incorrect character ever!

Fri, 02/11/2011 - 18:18 | 954338 hambone
hambone's picture

Life is short and manipulation (not can go on a long time.  Thanks for the laugh along the way.

Fri, 02/11/2011 - 18:29 | 954369 ColonelCooper
ColonelCooper's picture

Don't say oral.  I just saw a clip of Angela Merkel and I'm filling up.

Fri, 02/11/2011 - 20:46 | 954719 rocker
rocker's picture

Did you say you saw Angela's clit ?                                        Must need new reading glasses.            LOL

Fri, 02/11/2011 - 22:11 | 954925 mynhair
mynhair's picture

Oh gawd, the visual pain!

Fri, 02/11/2011 - 18:35 | 954385 Cthonic
Cthonic's picture

Don't forget the electrolytes.

Fri, 02/11/2011 - 17:42 | 954219 AssFire
AssFire's picture

Hmmm, now why would the IMF be looking to replace the dollar??

Fri, 02/11/2011 - 17:51 | 954255 Confused
Confused's picture

A bit scary. No? 

Sat, 02/12/2011 - 08:02 | 955483 Ungaro
Ungaro's picture

'Cause the IMF (Ignorant Mudda F***ers) would prefer a different brand of toilet paper than Dr. B. S. Bernanke is pushing.

Fri, 02/11/2011 - 17:46 | 954237 Apart from Reality
Apart from Reality's picture

Damnation.  I will have to Add an M2 dial to my Market Manipulation machine now



Fri, 02/11/2011 - 17:46 | 954238 BlackThought
BlackThought's picture

What is M2?? Thx

Fri, 02/11/2011 - 17:50 | 954245 plocequ1
plocequ1's picture

M2 is the Bus that takes me to Brooklyn every morning.  Rally on

Fri, 02/11/2011 - 18:32 | 954378 Tao Jonesing
Tao Jonesing's picture

M2 is one of several money supply aggregates that the Fed tracks.

M0, also called "base money," is the total currency in circulation, including currency maintained by banks as reserves.

M1 includes base money minus bank reservers plus "demand money," e.g., checking account balances that depositors may draw upon "on demand."

M2 is the next level up and includes M1 plus savings accounts and certificates of deposits valued at less than $100k.

The Fed no longer tracks M3, but that aggregate includes all of M2 plus CDs > $100K and other big money institutional accounts.

When considering the growth in M2, I'd like to understand what portion of that growth was actually growth in M1.  Before asserting that M3 is growing, too, I'd like to understand what portion of that growth is actually M2 growth.  It could be that a substantial portion of M2 growth is due to money moving from M3 to M2.

As much as people talk about out of control money printing, you're not seeing that reflected in the amount of money that is really in circulation.  For example, the banks sucked up all of QE1 as reserves, the amount of money in circulation has pretty much stuck to the mean growth line that existed before QE1.  QE2 is a different matter: almost all of that money is going leveraged financial speculation, and when you see $40B being added to savings accounts and CDs in one week, you're seeing the "cash" from the sales of financial assets purchases with QE2 money that has been levered up through fractional-reserve lending (i.e., money created out of thin air).

If you look at everything from a practical point of view, you'll see that the banks only have enough currency on reserve to pay for about 110% of what's on deposit in demand accounts, so rising M2 is just creating more claims to the same level of base money.  So, looking at M2 to find hyperinflation is kind of silly, as not all of it can be redeemed for currency.  What rising M2 tells us, though, is we have inflated prices in financial assets, which is giving rise to what my banker friends call screwflation.

Fri, 02/11/2011 - 20:46 | 954612 Slim
Slim's picture
Sat, 02/12/2011 - 08:26 | 955492 Freewheelin Franklin
Freewheelin Franklin's picture

When considering the growth in M2, I'd like to understand what portion of that growth was actually growth in M1.  Before asserting that M3 is growing, too, I'd like to understand what portion of that growth is actually M2 growth.  It could be that a substantial portion of M2 growth is due to money moving from M3 to M2.


That information will be provided on a "need-to-know" basis, and you, sure-as-shit, do not need to know. Actually, we don't know, either. We're too fucking lazy to do the work.




Sat, 02/12/2011 - 16:59 | 956163 ThirdCoastSurfer
ThirdCoastSurfer's picture

M2 Jan

1980 1486.2

1981 1610.6

+8% YOY


1990 3176.1

1991 3293.8

+4% YOY +51% DOD


2000 4668.9

2001 4971.6

+6% YOY 34% DOD


2010 8476.3

2011 8840.0

+4% YOY +44% DOD

All % are rounded

Thus the story and the mystery is and remains M3. 

I think the contention that those who own and control that unique and hidden part of M3 ($100 million bonus Institutions) continues to increase by leaps and bounds while maintaining social stability through a manufactured stable M2 is spot on.

Fri, 02/11/2011 - 17:48 | 954240 becky quick and...
becky quick and her beautiful mouth's picture

looks like the trajectory of the missle the chinese fired off the coast.

Fri, 02/11/2011 - 18:21 | 954349 hambone
hambone's picture

You mean to say the plane that took off from nowhere and landed nowhere (apparently that part of the world doesn't get much air traffic and no way to track these things down there).

Fri, 02/11/2011 - 17:48 | 954241 BKGuy
BKGuy's picture


How does your M3 analysis reconcile with that of John Williams at, which still suggests M3 contraction m-t-m and y-o-y?

Fri, 02/11/2011 - 18:07 | 954306 topcallingtroll
topcallingtroll's picture

It would be interesting to hear a discussion about Tyler's numbers versus Williams' numbers.  The main reason the fed said they dropped m3 was that it could not be reliably calculated, and that m2 was sufficient. 

Sat, 02/12/2011 - 08:00 | 955480 Ungaro
Ungaro's picture

Nah, attempting calculate M3 caused an arithmetic overflow on the Cray and crashed the whole RPG program.

Fri, 02/11/2011 - 17:54 | 954264 Bigger Dickus
Bigger Dickus's picture

Tyler, why all the hype? You're clearly biased when you don't mention the proportional fall in velocity.

Fri, 02/11/2011 - 17:59 | 954277 Tyler Durden
Tyler Durden's picture

M2 Velocity is a qtrly number and the last release was in October. How do you know it is currently declining? Shadow liabilities increased post the last velocity update. We are "100% confident" the next velocity reading will be up - not difficult: after all it is based on a manipulated GDP number. How about the first time increase in revolving loans in two years? What about the $1.7 trillion (as end of June) in excess reserves just waiting to be unleashed and blow up the economy, which can only be protected by the Fed hiking the IOER to 3,4,5% or higher which inverts the curve... and blows up the economy?

No hype - just the facts.

Fri, 02/11/2011 - 18:03 | 954292 topcallingtroll
topcallingtroll's picture

I sure hate to have to agree with you, but velocity probably will be up, but my crystal balz tell me that it won't be up as much as people feared.  Looking forward to you reporting on it!

Fri, 02/11/2011 - 18:05 | 954298 Bigger Dickus
Bigger Dickus's picture

Ok, but there's no lending to speak of so V can ultimately only come from credit creation from credit sales or a wage spike. The spike in credit purchases would have to be HUGE for it to hve any effect and I'm not seeing a wage spike.

Sorry Tyler, you should be on the deflationary side just to hedge your long PMs calls. That's what I'm doing.

Fri, 02/11/2011 - 18:10 | 954315 topcallingtroll
topcallingtroll's picture

I've just went long silver and have been long natgas since 5.47.  This means for sure that deflation and a stronger dollar are here for the next few months.

Fri, 02/11/2011 - 18:12 | 954323 Tyler Durden
Tyler Durden's picture

"Deflationary side" assumes Bernanke is rational and he will agree to throw away two years of lunatic monetary policy. He won't. He is stuck in a corner from which there is no exit. The more he prints the more he has to print (even though incremental debt benefit is now negative). He will print until his CPI model tells him he is succeeding at creating goldilocks core inflation (which it never will in the New Normal - for the reason why, see two years of posts on Zero Hedge), or destroy the dollar in the process. Bernanke is convinced there is no threat to the dollar as a reserve currency status. He is very wrong there too. Throw in the need to monetize $4 trillion in debt in two years, and there is no chance he will stop printing. Sure, he will crash the market in March/April when 10 Years hit 4% and everyone gets worried about rates, but all that will do is reset the new baseline for gold/PMs, just like back in 2010. Then when QE3 is announced later in the year, the last case for "gold as money" will be made. At that point the price of gold in USDs will be irrelevant.

Fri, 02/11/2011 - 18:43 | 954357 slewie the pi-rat
slewie the pi-rat's picture


nice quote from sartre.  maybe RT knows if there's an ETF w/ a triple lindy.

other than physical, of course.

Fri, 02/11/2011 - 18:38 | 954392 Caviar Emptor
Caviar Emptor's picture

The more he prints the more he has to print


You nailed it, Tyler. It's a negative feedback loop. And the US has now joined the ranks of bankrupt nations of the world at a bad time. He's Atlas supporting the entire financial complex on his back. He's got no choice but to keep forging ahead and hope for a miracle. But he's tarnishing the brand. 

Fri, 02/11/2011 - 19:09 | 954465's picture

The Bernanke is no Atlas. He's a Mouch.

Fri, 02/11/2011 - 19:04 | 954449 truont
truont's picture

"Deflationary side" assumes Bernanke is rational and he will agree to throw away two years of lunatic monetary policy. He won't.

Exactly, TD.

Robert Prechter and deflationists would be correct, but they completely ignore the monetary power CONgress has handed over to the banksters (who own the FED). 

Fri, 02/11/2011 - 20:26 | 954671 Spalding_Smailes
Spalding_Smailes's picture

WASHINGTON, D.C. – Feb. 10, 2011 – The Association of American Railroads (AAR) today reported a mix in weekly rail traffic as a result of winter storms in parts of the country last week. For the week ending Feb. 5, 2011, rail carloads were flat with U.S. railroads originating 267,682 carloads, while intermodal volume was down 1.5 percent to 198,249 trailers and containers, compared with the same week in 2010. Intermodal container volume declined 2.5 percent while trailer volume increased 4.1 percent.

Eight of the 20 carload commodity groups posted increases from the comparable week in 2010 with metallic ores leading the groups with an increase of 33.5 percent.Commodity groups reporting notable declines were farm products excluding grain, down 17.9 percent; grain mill products, down 14.5 percent; coke, down 14.1 percent; and waste and nonferrous scrap, down 13.3 percent.

Weekly carload volume on Eastern railroads was up 5.8 percent compared with last year. In the West, weekly carload volume was down 3.6 percent compared with the same week in 2010.

For the first five weeks of 2011, U.S. railroads reported cumulative volume of 1,409,975 carloads, up 6.4 percent from last year, and 1,061,348 trailers and containers, up 5.7 percent from the same point in 2010.

Canadian railroads reported volume of 67,536 cars for the week, down 2.6 percent from last year, and 44,322 trailers and containers, up 1.7 percent from 2010. For the first five weeks of 2011, Canadian railroads reported cumulative volume of 345,678 carloads, down 1.8 percent from the same point last year, and 222,918 trailers and containers, up 2.4 percent from last year.

Mexican railroads reported 13,248 carloads for the week, up 18.9 percent compared with the same week last year, and 7,581 trailers and containers, up 46.2 percent. Cumulative volume on Mexican railroads for the first five weeks of 2011 was reported as 71,704 carloads, up 9.1 percent from the same point last year, and 34,803 trailers and containers, up 11.6 percent.

Sat, 02/12/2011 - 10:57 | 955609 Twindrives
Twindrives's picture

Hey Spalding, why don't you jump on a boxcar going to Mexico.  You won't be missed, we promise. 

Fri, 02/11/2011 - 22:14 | 954931 mynhair
mynhair's picture

Incremental went negative?  Thought we still got 4 cents for every buck!  Damn, I need a less comfortable couch!

Fri, 02/11/2011 - 22:17 | 954932 mynhair
mynhair's picture

Impatient dup deleted

Sat, 02/12/2011 - 00:55 | 955186 teolawki
teolawki's picture

In a nutshell...the pooch is screwed and pregnant.

Sat, 02/12/2011 - 09:11 | 955528 Snidley Whipsnae
Snidley Whipsnae's picture

Excellent points... "At that point the price of gold in USDs will be irrelevant."

To me personally, the gold to dollar ratio is already irrelevant.

...and, the Fed has no realistic way to change course. If they try to withdraw liquidity from the system by selling the bs they bought from the money center banks they will find only offers of pennies on the dollar.

The Fed is on a one way street terminating at a brick wall... and their accelerator is stuck to the floor.

Fri, 02/11/2011 - 18:32 | 954375 ArkansasAngie
ArkansasAngie's picture

So that's what TBTF Bankster Bonuses are for ... the start of trickle down.

Fri, 02/11/2011 - 18:39 | 954393 Hedge Jobs
Hedge Jobs's picture

agree with TD here Bigger Dickus not too sure setting up for deflation is such a good idea. I got toasted doing the same thing mid last year. I was in the deflation camp thinking QE1 was a one off. Had QE2 not been announced the deflationary double dip was a certainty if the economy been left to run its natural course. Its QE3,4,5 whatever it wont matter there will be no deflation so just BTFD!

Congrats to spitzer on this though, he was calling hyper inflation over deflation long ago.


Sat, 02/12/2011 - 09:13 | 955529 Snidley Whipsnae
Snidley Whipsnae's picture

We're going to get both. Hyperinflation and deflation. Get popcorn, watch show.

Sat, 02/12/2011 - 00:43 | 955169 teolawki
teolawki's picture

Do you see real (vs. gov style) price inflation at the grocery store and gas pump? I don't think you'd see that without an increase in velocity. Please correct me if I'm wrong.

Sat, 02/12/2011 - 09:20 | 955532 Snidley Whipsnae
Snidley Whipsnae's picture

Yes, I see prices of groceries and gas rising. It IS NOT NOW being caused by a rise in the velocity of money. It is being caused by POMO operations at money center banks in the various commodities markets and excess liquidity creation by the Fed. The excess liquidity is seeking a return on investment in the commodities markets... Thus commodities prices are skyrocketing.

The rise in prices at the stores and gas pumps are not being driven by higher consumer demand, iows.

Fri, 02/11/2011 - 18:00 | 954283 Roy Bush
Roy Bush's picture

You're right....however, when this money hits the streets (like it's already done in the developing world...and quietly in ours), WATCH OUT!  Increases in monetary supply always lead to inevitable inflation.  

Sat, 02/12/2011 - 08:47 | 955502 Zero Govt
Zero Govt's picture

the Deflationary side assumes Bernanke is rational and he will agree to throw away two years of lunatic monetary policy

Tyler, what if the deflationary side has nothing to do with Bernanke? What if deflationists don't give a fuking rats arse what Bernank does living up in his ivory tower pretending he's Master of the Universe? What if the inflationists (35,000 economists and 99.99% of the population) are making the colossal error of measuring a money event when economics is actually a human event???

Here's the clue to unravel the economic puzzle and pinpoint why economists and inflationists know jack-shit and cannot predict events nor even explain after events... even after 300 years of trying... Doh!!

Fuck Bernanke and the US Govt. Focus instead on businessmen, the REAL  economy, not the f'n financial nonsense going on in Wall Street and 'raise the debt ceiling Washington'. In the REAL economy businessmen are contracting investment, storing cash reserves, cutting costs to the bone (deflation, deflation, deflation).

They're also dealing with consumers (70% of GDP) who are paying off debt, cutting up credit cards and have stopped the credit card live on the never-never lifestyle. Property, cars and consumer goods are completely bottlenecked, nobody is buying, the consumer is on its last dying breath (deflation, deflation, deflation).

Get your head out of the numbers, they are close to worthless. This is not a numerical event  (that's why economists are useless), this is a human event. Capitalism is a human process, not a mathematical one. The consumer and businessmen are in deflation mode, the parasites in Washington and Wall Street have no control over what is happening and what is coming  

Sat, 02/12/2011 - 12:29 | 955724 B9K9
B9K9's picture

This is a great comment. The way I approach the problem is to reduce the number of core variables. On one hand, the central government has two distinct advantages:

  1. Absolute police power (both foreign & domestic)
  2. Global monetary reserve status

Note that these two elements share a common characteristic in that they are creations of man. On the other hand, present American society has four key disadvantages:

  1. Declining domestic oil reserves
  2. Total population & inverted demographics (both age & IQ)
  3. Eviscerated productive economy
  4. Total debt & inverted welfare state (both accumulated balance and dependents)

As above, note that the last two share a common characteristic in that they are creations of man. That is, in a pinch we could throw up trade barriers, re-industrialize and collapse the welfare state. Yes, difficult to accomplish, but by no means 'impossible'.

However, the real killers are the first two items. This is the same situation Egypt and every country in the world either currently faces or will face. It doesn't matter what type of government is in place - the issue is population overshoot & declining fossil fuels. The miracle petroleum is what allowed us to even harbor expectations of future wealth & comfort. Absent oil's true 'wealth effect', we're all back in the same boat as our ancestors. That is, subject to a master-slave relationship where humans, not machines, provide the actual horsepower.

This is why the real trend is deflation. Ben can print all he wants, and sure, we're seeing the effects show in prices of nominally priced goods. But the real effect are the true prices of investments, including housing stock. No one is taking out loans (an act of confidence) to finance future growth expectations.

As Zero Gov't says, forget the numbers. Just look around. What do you see? I see empty roads in what has been traditionally one of the most congested, car dependent regions in the country. That's reality. It's not just the price of gas - it's because people have no jobs in which to commute. Rounding out that picture with a complete lack of building activity, and a shit load of people hanging around the beach (since they have nothing better to do), provides a better trend line than the mere temporal acts of one man.

Sat, 02/12/2011 - 08:42 | 955509 Freewheelin Franklin
Freewheelin Franklin's picture

Yes, and the masses do not understand that real wages never keep pace with real inflation.


This much is certain: the debts of consumers, businesses, farmers, and municipalities grow faster than the respective incomes.

-Palyi, An Inflation Primer (1961)


Fri, 02/11/2011 - 18:01 | 954288 EconomyPolitics
EconomyPolitics's picture

Hey Tyler et al,  Why are these numbers different from the numbers that the Fed puts out weekly?  I have been keeping track of M2 and show by the Fed's numbers that M2 peaked in November at 8833.1 BB.

I'm just taking my numbers from the weekly data download and adding up M1 and non M1 M2.



Fri, 02/11/2011 - 18:18 | 954340 papaswamp
papaswamp's picture

Nov 2010....8785 (SA)

Jan 2011.....8837p(SA)   8840 (NSA)

Fri, 02/11/2011 - 19:36 | 954528 EconomyPolitics
EconomyPolitics's picture

Sorry,  I was looking at the wrong date.  Nov 15 was still higher than today though at 8833.1, but January 17th was even higher.  Both were higher than today's Jan 31 release.

Another take on the weekly M2:

You gave me the monthly release, not the weekly release which is what ZH is tracking.  I even tried looking at the 4 week average which to see if that corresponds to the data, but I don't a big increase in the 4 week average.  It's flat.

Jan 31 sum M1 components=1895.5

Jan 31 Non M1, M2=6865.3

Jan 31 Total = 8760.8


Jan 17 sum M1 components=1852.8

Jan 17 Non M1, M2=7087.4

Jan 17 Total = 8940.2 

Fri, 02/11/2011 - 18:13 | 954324 SteveNYC
SteveNYC's picture

Looks just like the market indices....oh hang on.....

Fri, 02/11/2011 - 18:14 | 954326 A_MacLaren
A_MacLaren's picture

The Bears are out with their

Part 4 - Silver and Gold Manipulation Explained


Fri, 02/11/2011 - 18:26 | 954364 Obaminator
Obaminator's picture

Who the hell is actually buying US Debt in order to allow the money supply to grow?

China Selling. Russia Selling. Japan staying at Par.

Oh...thats right, We are buying our own debt.

No Worries!

Fri, 02/11/2011 - 18:35 | 954382 hambone
hambone's picture

All we need is $425B a month to rollover existing T's + issue new.  We only need $5T a year (roughly one third our entire GDP annually...and $3T more than our tax revenue).

I don't see a problem...who wouldn't want to purchase a nearly zero yielding T that is being devalued daily.  Just make sure you get there early to beat the lines.

Sat, 02/12/2011 - 11:04 | 955614 hedgeless_horseman
hedgeless_horseman's picture

Stock "market" corrections that scare "investors" back to treasuries will only work so many times before disintermediation takes hold in a serious fashion. 

The Great Disintermediation will be BYOB (Be Your Own Bank).

Fri, 02/11/2011 - 18:29 | 954370 Xibalba
Xibalba's picture

One Ring to rule them all

Fri, 02/11/2011 - 18:35 | 954388 SDRII
SDRII's picture

Flow of funds will be handled by next release

Fri, 02/11/2011 - 18:42 | 954401 Caviar Emptor
Caviar Emptor's picture

Tarnishing the brand: most humiliating moment of the week: Deutsche Borse-NYSE merger talks announced. 

Sun, 02/13/2011 - 20:44 | 954521 slewie the pi-rat
slewie the pi-rat's picture


apologies to saint pete:YouTube - Arlo Guthrie /City of New Orleans

apologies to accomplished yogis, worldwide, incuding my son, my daughter, and my bro in the cafe.

thanx to my own teacher, pondurengaduck.

BE    SERVE    GROW   

Sat, 02/12/2011 - 07:50 | 955477 Ungaro
Ungaro's picture

Which will lead to to just as happy an outcome as did the Daimler Benz - Chrysler merger. Good luck with that.

Fri, 02/11/2011 - 18:48 | 954416 jimmyjames
jimmyjames's picture

M2 contains more than credit-

It also contains time deposits+savings+MMMF's which is classed as MZM-

Savings and MZM has been climbing which has to have had an effect on M2-

I think using M2 as gauge of credit expansion is flawed-

There's no expansion or decrease in money or credit supply through MZM or Savings and yet both have an effect on M2


Fri, 02/11/2011 - 18:57 | 954441 Robslob
Robslob's picture

Or another way to look at QE and M2...bad money always scares good money out of the market...the only way bad money (speculation) to win without getting ones face ripped off is for the "bigger fool" to come out and play...

Fri, 02/11/2011 - 19:11 | 954442 THE DORK OF CORK
THE DORK OF CORK's picture

Europe is trying to deflate wages against a more slowly inflated currency.

This is inflation by another name but it has added disadvantages - compound interest dependent savers do well while wage earners are crushed or loose jobs , the advantage of a strong debt currency is that commodity prices are lower but unsustainable trade is kept alive through a hard debt money system - if they continue Germany will have much greater trade relationships with Asia and Russia while re wilding the poorer parts of Western europe - the Germans may fancy a urban adventure holiday in Limerick to spice up their life much like the Chernobyl adventure safaris of today but is this sustainable ? - it certainly won't be safe.

This is creating huge imbalances in the periphery - people who made their money during the boom are holding on to their deposits , while the young sit idle or do pointless jobs.

If you consider the dollar as money Bernanke's policey is rational  - credit money needs to be destroyed by base money creation - in the dollar system there is no other way to keep the system alive.

Sat, 02/12/2011 - 00:31 | 955153 PY-129-20
PY-129-20's picture

Either that or you begin to give us your land. We've made already a proposal to the Greek. They simply can give us their islands to pay back their debts. This time we don't need to send paratroopers.

Hey, I am joking. The ordinary German is just pissed. We've a lot of problems in our own country. And about the Chinese? Well, I don't know what happens when they crash. But it won't be good for us. *sigh* Less Chinese that can buy BMW, Mercedes, Porsche and Volkswagen. :/


Fri, 02/11/2011 - 19:05 | 954454 Robslob
Robslob's picture

But what does that mean?

Fri, 02/11/2011 - 21:17 | 954801 whatz that smell
whatz that smell's picture

kill your self now before the great and powerful oz does it for you.

praise be the bernank. may he ease a thousand years.

Fri, 02/11/2011 - 22:20 | 954939 mynhair
mynhair's picture

Anyone seen Wanker?  You don't really suppose he sold all his Apfel, do you?

Sat, 02/12/2011 - 05:06 | 955420 Hephasteus
Hephasteus's picture

Yes. He's bigus dickus, used to be johnny bravo.

Fri, 02/11/2011 - 23:19 | 955044 UglyPatheticPauper
UglyPatheticPauper's picture

Are we in Kansas yet??

Sat, 02/12/2011 - 05:08 | 955421 Hephasteus
Hephasteus's picture

So M2 is seasonally adjusting for salted good delivery bars.

To see a chef in your dream, represents transformation and changes. Consider what is "cooking" in your life?

Can you smell what the crock is cooking?


Sat, 02/12/2011 - 07:45 | 955475 Ungaro
Ungaro's picture

Could someone please overlay SPY or $SPX on the M2 chart?

Sat, 02/12/2011 - 14:07 | 955872 Matt
Matt's picture

Are you thinking there is a correlation between S&P 500 and M2? The charts do look pretty similar to my untrained eye. the timings seem a little off though; sometimes the SPY moves slightly before or after M2, so the dips and peaks dont quite line up for some reason.

Sat, 02/12/2011 - 08:13 | 955485 Ungaro
Ungaro's picture

I have been very fortunate to inherit a few hundred quadrillion Hungarian pengõs from my grandparents -- all in cash. There was a time when the smallest meaningful denomination was the trillion pengõ note, but it only lasted for an afternoon.

They did not want to spoil me with their riches, so they dribbled out the money. It started with a 5 pengõ note, a month later I got a tenner, then a twenty and so forth until finally I received a stack of 100-quadrillion pengõ notes.

Coming to a theater near you.

Sat, 02/12/2011 - 17:58 | 956341 Buyemall
Buyemall's picture

It's not going to stop climbing until the elections or, and that would be a surprise , the unemployment rate drops faster than anticipated. Interest rate hike next? What if Europe has to raise them before the end of this year.


Do NOT follow this link or you will be banned from the site!