-->Here's an interesting statement from Harry Schultz, printed in the 6/23/03 issue of the HSL newsletter:

"Are you under the impression that Central Banks -- especially the U.S. Fed -- are pumping money and credit? That's a logical assumption, because their biggest guns tell us so. I thought so too, until I looked at the data. It's relative fiction. Increasing money supply somewhat, yes. Compared with the historic past, yes. But compared with recent past, no. Compared with their promises, no. Compared to the needs? Absolutely not!"

Schultz goes on to point out that the actual money supply numbers, looked at cold, do not amount to much until you have something to compare them to. He states that rate of change is all that counts, and I agree as this is something I've been preaching for years. I keep up a monthly chart of M3 money supply shown from a 10-month rate of change (ROC) standpoint. You'll note that M3 is in a significant downward trend as the overall money supply continues to lose momentum. As Schultz states,"When the rate of change declines you are shrinking at an increasing rate. What is not rising via rate of change is, by definition, shrinking -- the Accelerator Factor, an axiom of economic understanding!"

He adds,"To make it worse, not only is money supply shrinking lately, but the velocity of money is dangerously low," pointing out that this is the same pattern the Fed followed in 1928-1929, which of course led to the Great Crash and eventually to the Great Depression."If this hesitancy [to increase money supply] isn't stopped fast, we're headed into the same trap," wrote Schultz. Steve Saville, of the Speculative Investor, recently added to this observation,"...the year-over-year change in the total supply of U.S. dollars (M3), while still reasonably healthy by historical standards, it has plunged over the past 15 months. Furthermore, if the trend in money supply growth continues for another year then the money supply will start to contract (the U.S. will experience genuine deflation)."

To this end, the following quote from a recent Elliott Wave Financial Forecast newsletter adequately sums up the growing threat of deflation in the U.S. economy:

"The reason the Fed didn't use the word [deflation] is that it recognizes that deflation is a self-reinforcing psychological process. Once it gains a small place in people's expectations, it will feed on itself as consumers and businesses have no choice but to respond in ways that foster its development. The barrage of headlines over the last three weeks signals that deflation is truly at hand. In recent days, the Wall Street Journal has followed with stories noting that the underlying inflation rate is at a 37-year low and a special IMF task force assigned to study the deflationary risks in the world's 35 largest economies has found that there is actually some risk of it outside Japan. The IMF now says Germany, the United States, Singapore, China and 15 other countries could experience deflation. Now that deflation has its foot in the door, the only logical response is to take defensive action."

To this I can only add that the 1-2 years ahead should see extraordinary deflation across the stock and real estate sectors, as well as in the general economy, and"defensive action" is indeed imperative.

--Clif Droke
Jul 2, 2003
mail: clif@clifdroke.com
<ul> ~ Quelle</ul>

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Oh, oh. Könnte (2-fache?) Schulter-Kopf-Schulter mit abfallender Nackenlinie werden. Autsch.

Wenn, dann sollten wir von ca. jatzt bis ende dieses/anfang nächstes Jahr abtauchen, danach Rebound in 2004 (Wahljahr in US). Und dann, wenn alles glaubt, die Erholung ist da, kommt der wirklich dicke Hund. Doppelautsch.

Hat jemand einen langfristigen Chart??

Gruß
Diogenes

-->in einem Interview mit der FT.

und offen gesagt, die Herrschaften drücken sich schon etwas schlampig
aus. Worum geht's ihnen denn nun, um die Wachstumsgeschwindigkeit, um
das Wachstum oder um die absolute Geldmenge?! Sind dreierlei Paar Stiefel.
Zum anderen werd ich aus der Skalierung der Graphik nicht schlau.

Immerhin ist M3 ( saisonal nicht angepasst) über die letzten 12 Monate
um ca. 6,6% gestiegen.

<ul> ~ Originaldaten sind immer was Feines</ul>

-->Hi,

alles Käse. M2/M3 wächst ca. 8% / Jahr und S. Saville hält ( wie ich auch ) das ganze Deflationsgerede für Manipulationsversuche. In seinem heutigen Wochenupdate sagt er folgendes:

At the beginning of this year the M2 growth rate had dropped to a 'dangerously low' level (6% now appears to be the level of M2 growth at which the US financial system has a big problem), but fortunately a steady recovery in the money supply growth rate got underway at that time. This recovery was fueled by a) increased US Government borrowing, b) the aggressive buying of US Government and Agency debt by Asian central banks, c) a Federal Reserve promise to suppress long-term interest rates, and d) the rally in the Japanese bond market. While item a) above caused a direct addition to the money supply, items b), c) and d) indirectly boosted money supply growth by putting downward pressure on mortgage interest rates (the lower mortgage rates perpetuated the bubble in mortgage debt).

-->Diogenes:[i] Hat jemand einen langfristigen Chart??</blockqoute>

[img][/img]
(Datenquelle der verwendeten Rohdaten:economagic)