by deMolay » Sun 18 Apr 2010, 22:08:15
$this->bbcode_second_pass_quote('', 'T')he chart above from Shadow Government Statistics is more than a little alarming. The M3 money supply reporting is shown above, which we all used to watch meticulously and was suddenly and suspiciously dropped without explanation in March 2007. John Williams of Shadow Government Statistics still rigorously tracks it. According to William’s models it now went negative. This is a major concern that the M3 slope has been heading down since the 2008 financial crisis occurred, but a much bigger concern is that it has now turned negative. This means money supply as measured by the M3 is contracting. We also see that the narrower M2 measure is fast approaching that critical event. This is huge news that is receiving little attention since it is no longer published by the government. A few years ago this news would have shaken financial markets.
The demarcation from zero, means the money supply is now contracting and therefore there is less money available in circulation to buy such financial assets as US Treasury securities. Since there is less money available, it should indicate that new US Treasury bond offering would be facing lower prices and hence higher yields. Minimally, we should be seeing pressures in the bid to cover ratios in the US Treasury Auction. Surprisingly, we are not.
"We Are All Travellers, From The Sweet Grass To The Packing House, From Birth To Death, We Wander Between The Two Eternities". An Old Cowboy.