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M2 Passes $8.8 Trillion, Non Seasonally Adjusted M2 Surges By $57 Billion In Prior Week
Seasonally adjusted M2 has just surpassed $8.8 trillion for the first time, hitting a record $8,802.2 billion, a jump of $16 billion on a SA basis. This is the 17th out of 18 consecutive weeks that M2 has increased. On a non-seasonally adjusted basis, M2 also jumped to a record high, hitting $8,765 billion, a jump of $56.9 billion W/W, and an increase if just over $100 billion in the past two weeks alone.
Seasonally Adjusted M2:
Non-Seasonally Adjusted M2:
While the jump itself is not surprising as it comes in anticipation, and realization, of QE2 (we would love to have the semantic and highly theoretical debate of whether or not the Fed "prints money" but will focus on the practical for now), the last week's components of the M2 change were odd to say the least. In the past week we saw both the biggest drop in commercial banks savings deposits in 2010 ($61.3 billion) and the biggest jump in demand deposits ($57.6 billion).
Whether or not this is due to the recently adopted unlimited guarantee by the FDIC on demand deposits is unclear, however as the chart below shows this is certainly a very odd move, and is indicative that there has been a notable readjustment in the bank deposit base. The surge in demand deposits brings the total to $536.2 billion, an increase of $94 billion from the beginning of the year. And despits the drop, savings deposits are also markedly higher compared to the start of the year: at $4,336.7 billion, $337.8 billion higher than at the end of 2009. Whether this is a pull driven transfer, as banks need to replenish their deposit basis is also unknown. We will keep a close eye on this, as such a major reallocation of bank deposit liquidity has not occured in over a year.
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Risk Assets are crashing in Asia tonight....
Is it time to sell everything Robo ??? No more NFLX, CMG, or PCLN.
"Risk" assets have not been risky for ten years. Silver pushed $1.50 today, what goes up must come down. Silver has high volatility, so what.
Look Robo, a hot babe! She has a risky side, and an app to show you.
MrsSilverQueen reviews the Precious Vault iPhone app!!:http://www.youtube.com/watch?v=4uXwveYd2nc
Now that's MY woman!
Hmmm... wonder if that app reports your portfolio value to the Fed? It's already known that iPhone GPS tracking is reported to the cops.
Thanks Robo, you always have good stuff.
not crashing RT but certainly plenty of selling around the region today with some big reversals after this mornings "optimism". Banks copping the brunt of the selling seems to suggest the bailout is far from a done deal
And cotton down 3.5%
It may be more complicated than printing monie with, but it certainly does create "monie". The huge move from savings to demand is exceptional.
The global economy is tenuous on so many levels. Quite frankly, it wouldn't take much (or that many interested parties) to start blowing on the house of cards to make some serious scratch. Not much at all.
What's M3 doing?
M1, a good indicator of future CPI is up over 5% in one year (since last Nov).
M1 is a good indicator of future CPI? Where is the evidence?
Here is a graph of M1 vs CPI:
http://research.stlouisfed.org/fred2/graph/?graph_id=32345&category_id=0
Does it look like M1 is a good indicator of future inflation?
Do note how M1 was up 18 to 20% for most of 2009, much higher than today. Are we getting 18 to 20% inflation now?
M1 is only a good indicator of future inflation when velocity remains constant. When velocity drops off a cliff it is not.
In a credit deflationary environement like today, all your monetarist assumptions are DEAD.
Money = debt, M1 is only a tiny fraction of "money". As long as households and businesses don't pile on more debt, M1 can do whatever it wants, it won't affect inflation. Same for M2 and M3.
How does one measure the velocity of money? Speed camera over the cashier at the Apple store?
base money is not the same as credit money - it isnt all the same - commoditiesare waving
But it isn't really "multiplying yet". But whoa oh whoa, when money supply does start spinning, watch out. Meanwhile, they're just gonna keep expanding it until it gets traction. Doubt they'll be able to get the genie back in the bottle then. Until then, drip drip drip.
And why would it start spinning when households and businesses are so overloaded with debt they are not ready to pile on more for decades to come.
Rangel begs for censure. A much different tune than yesterday. They should move for expulsion and prove they are going to handle business different now.
burning man
rumors china will hike rates later today.
Big Trouble in little China tonight.
Our Futures looking as shitty as their markets tonight.
Hang Seng down 1.5%
How do you think that GM IPO gonna do in a huge down market tommorow
????????????
Big Trouble in little China tonight? No. Its all good.
http://www.marketwatch.com/story/china-shares-rebound-ignoring-rate-hike...
dup...
The Bernank declared war on Chinese growth tonight. The Hang Seng is down over 350 points as I write this. This will be the big news tomorrow as the Bernank justifies a weak USD and answers his critics. "It's not fair that the emerging countries get all the growth," he declares. "I'll teach them a lesson", he implies.
Looking at the charts--see the big move up when QE2 was announced? After the gap and monster move up, equities have fallen back quickly BELOW the starting point of the big QE2 move up. The gap was filled quickly. But then instead of resuming the move up in the original direction of the gap, equities fell below that starting point. When markets cannot hold a major league gap up and fall back below the starting point of the gap that's known as an exhaustion gap and is bearish. There are a number of bearish signals right now such as the moving average cross overs (5-day crossing below the 10-day). I think we're sitting at a multi month high right now.
Where does the fed keep all its money?
In debasement!
rage!
+ POMO
.
Text book to the letter. The more QE the lower velocity will go the relationship will hold as it always has. Having more money does not (and will not in this case) lead to higher velocity of money. This relationship has held since 1947. Without demand for money look for the same.