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Money Supply, the Dollar, and Gold:
Normally my take on rising M-3 is that it means most markets, especially equities, will rise (see issues nos. 50 and 52 in the archives at www.technicalindicatorindex.com). However, the unprecedented pre-crisis liquidity infusions we are seeing this past month are saying something else. The amount of growth is too much, too soon, indicative of an unseen (to all but the master planners) imbalance about to blow. The Fed knows something, and their massive infusion of liquidity is a signal that a crash event is not only imminent, but likely unavoidable. The extraordinary M-3 growth we are seeing is the level of liquidity infused to halt crashes, and to fuel post-crash recoveries. Given that M-3 increases take 1 to 6 months to affect markets, that means what has just been injected into the economy should be kicking in around mid to late summer, just about when the 2002/2004 analog suggests the coming crash should end.
There has never been a six-week infusion of M-3 of this size preemptively (before a crash has occurred) in the history of the United States.
There was only one other time we saw this level of M-3 growth over a six week period in the history of the United States, and that was AFTER 9/11/01. The Fed rightfully pumped $170 billion into the system the week of 9/17/01. They did a good job doing so. After the stock market crash of 1987, the Fed increased M-3 a mere 0.08 billion, or at the time 2.2 percent, from 3.61 to 3.69 trillion.
But in the past 4 weeks, M-3 is up a whopping $155 billion, a $2.0 trillion, 22.2 percent annualized pace. Since the Dow Industrials topped in February, M-3 is up $280 billion. The entire money supply in the U.S. was $2.0 trillion in 1981. The Fed is now on a pace to grow M-3 by that amount over the next twelve months.
We've had five equity crashes since this Bear market began in 2000. Here are the annual M-3 growth figures:
2000 - up $568 billion, up 8.6%.
2001 - up $900 billion, up 12.6%.
2002 - up $521 billion, up 6.5%.
2003 - up $272 billion, up 3.2%.
1st 5 months of 2004 - up $400 billion.
What bothers me most about this crisis level of liquidity infusion is that it is coming before a widely known catastrophe.
Originally posted by CookieMonster000 who says im being coy it wasnt meant to be funny god damn your an idiot...
Originally posted by CookieMonster000
i also noticed they raised those packs of gum with 5 sticks in it raised by 5 cents....would you say the economy just went through inflation of 25% percent?
Originally posted by gmcnulty
I see you're from NYC, Me, formerly.........explains lots..........what part of NYC?