An all jene welche noch an Märchen glauben, sollten

verfasst von Emerald, 19.10.2003, 05:43

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aus dem Freitags-Tages-Bericht von R.Russel, La-Jolla,Calif.

Now the following is something that nobody seems to realize or to be talking about, but it's absolutely crucial.

I'm talking the velocity of money or the rate-of-change in M-3, the broad money supply.

I'm looking at a chart of M-3 and its rate-of-change. On yesterday's site I posted the latest M-3 figure -- which was an almost shocking drop of $39 billion.

The rate-of-change for M-3 is now declining, and this is both informative and ominous. The velocity or turnover of money tells us what's actually happening in the economy. If the economy is expanding, it will see it via an increasing turnover of money. If the economy is contracting, money turnover will be decreasing.

The very recent decline in velocity or turnover of money may be telling the true story of what's happening in the US economy. Forget all the hype, forget the bullish weekly"announcements" by the various Fed governors, forget what you hear from the parade of bullish economists and fund managers on CNBC, the velocity or turnover or M-3 may be telling the real story.

Is this possible? Is it possible that despite all the hype, the US economy is going nowhere? That would be a huge shock, and it would impel the Fed to open the flood gates of money creation even wider. I have the feeling that the next month or so in the news on the economy will be critical. What if the velocity or M-3 is telling us the real story of the"recovery" in the US economy?

It is well to remember that you can flood the banks with liquidity, but you can't force people to buy. That was the problem that Japan faced for years -- the Japanese (unlike Americans) would save mightily, but they would not spend.

US home construction in September rose to its second highest level since 1986 but permits (a leading indicator) for future production dropped 2.2%. Auto sales are also beginning to slide. Housing and autos are the two biggest industries in the nation.

The velocity figures are hard to find, but subscribers who want to follow velocity should check out the following -- my friend, Fritz Reich, has a great site called www.investmenttools.com. This great site includes all kinds of valuable information and charts.

To locate M-3 velocity on this site, check"The Fed" on the far right of the green strip at the top of this site. Then click on the"Multiplier" which is another words for velocity. This will give you the critical"turnover of money" story updated weekly. And you'll be introduced to a great site besides.

PS:
Gar nichts für Hänsel und Gretel!


Emerald.

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gesamter Thread:

• An all jene welche noch an Märchen glauben, sollten - Emerald, 19.10.2003, 05:43
  • Investmenttools.com IST eine tolle Seite, danke Emerald und R.Russel! - BillyGoatGruff, 19.10.2003, 08:07
  • Vielen Dank - Yak, 19.10.2003, 08:38
    • Korrektur: _zu_ diesem Chart (owT) - Yak, 19.10.2003, 08:40
  • Ist Alan mit seinem Latein am Ende? - politico, 19.10.2003, 09:33
  • Re: Merci! Es geht nicht um"Umlauf-Tempo"... - dottore, 19.10.2003, 16:48
    • Re: Merci! Es geht nicht um"Umlauf-Tempo"... - Popeye, 19.10.2003, 17:34
      • "Charttechniker" würde stinkfrech steigende Trendlinie einzeichnen. - BillyGoatGruff, 19.10.2003, 20:30
        • Re:"Charttechniker" würde stinkfrech steigende Trendlinie einzeichnen. - Amanito, 19.10.2003, 22:42
        • Re:"Charttechniker" würde stinkfrech steigende Trendlinie einzeichnen. -Bingo! - CRASH_GURU, 19.10.2003, 22:50
    • @dottore: M2 genauso mL - Sorrento, 19.10.2003, 18:58
      • Re: @dottore: M2 genauso mL - dottore, 20.10.2003, 15:19