With quantitative easing under way, where is M3?

December 1, 2008 by · 1 Comment
Filed under: Opinion 

Well it would be nice to see what this number would be at if they still published it?  Many other people has reconstructed data sets that try and emulate the old statistic.  From all they I have read, the M3 measure of the money supply would be in double digits.  That does not say much for inflation when the business cycle picks up again.  At the time of this writing, the Dow Jones Industrial Index lost 7.7% today alone.  

I believe people are losing confidence in the system and the information they keep being told.  We are bailing out bad institutions with good money and in turn, reducing the confidence in our currency with their bad assets which should of never been made whole.  Why do I have to accept $24,000+ in debt to people who got greedy and wanted to raise their relative advantage higher?  

Why are we saving a system that has created more wealth disparity than wealth itself?  I thought we are suppose to have life, liberty and the pursuit of happiness protected and not oppressed?  You can see it in all the currently writings by our press and government.  It is all about getting the credit (debt) flowing and not actually address the problem of deficit spending, incentification of profit over job creation & raising of living standard which is what drives consumption in the first place.  We actually encourage companies to send job overseas to make products for consumption in the U.S.  

Who are we actually benefiting in that situation, I would say the shareholders to the determent of our people.  I am not advocating stepping away from free markets with prudent regulation at all, but I am saying that we should take into effect what the costs and benefits are by focusing on consumption and not production.  We need to address the real problems and make a system that give equal opportunity to all its people.  From their a person can and will choose their path in life.


With quantitative easing under way, money supply is going to become an increasingly important gauge.

Morgan Stanley notes the measure will be a key indicator of when ‘QE’ actually starts to kick in. Before adopting QE, all excess reserves created by the Fed were being hoarded by banks. Rather than increasing, the so-called money multiplier (the link between the Fed’s balance sheet and the money supply) had actually plummeted. The only other time this has happened is during the Great Depression, say Morgan Stanley. But there is reason to be optimistic.

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