Talk-Polywell.org

The M3 numbers are scary.

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

And they were predictive:

Mr Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, deeming it too erratic to be of much use.

This may have been a serious error since double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed talked of raising rates - gave a second warning that the economy was about to go into a nosedive.

More here http://www.shadowstats.com/

The Keynesians are really taking it on the chin this week. A study from Harvard found, to the authors' shock, that increased gov't spending actually hurt the private sector in a given congressional district.


Lots of good stuff here:

http://www.facebook.com/pages/Milton-Fr ... 4610222225

TallDave wrote:The M3 numbers are scary.

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

And they were predictive:

Mr Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, deeming it too erratic to be of much use.

This may have been a serious error since double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 - just as the Fed talked of raising rates - gave a second warning that the economy was about to go into a nosedive.

More here http://www.shadowstats.com/

The Keynesians are really taking it on the chin this week. A study from Harvard found, to the authors' shock, that increased spending actually jurt the private sector in a given congressional district.


Lots of good stuff here:

http://www.facebook.com/pages/Milton-Fr ... 4610222225

Arrgh! You beat me to it. I was thinking of posting that. Okay, for the chump prize, i'll post this:


Keynes' deathbed conversion to capitalism

"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."

http://www.americanthinker.com/blog/201 ... on_to.html


Even Keynes eventually caught on. Too bad his legacy lived longer than he did.

Heh. Good link, thanks for sharing.

Of particular amusement is Keynes' forword to the 1936 German version of the General Theory:

"The theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire."

Golly-gee-wiz batman, who'd have thunk it?

It should also be noted that the effect of Keynes' work was not to change the way the government behaved, but to arm the government with excuses and rationalisations for its pre-existing desires.

If the market is guided as if by an invisible hand, then surely the correct analogy for the behaviour of the government is a gun; everything the government does is ultimately backed by coersion.

The "invisible gun" of the state, lurking behind every statute and regulation?

I like it!

I may have to appropriate and promulgate that metaphor.

While we are talking about invisible hands, what about the one i'm often going on about?

mene mene tekel upharsin.

So the money supply contraction due to less lending is overtaking the money supply expansion from the 0bama regimes reckless spending. That would explain why we haven't seen rampant inflation yet. Given the excesses of lending in past decades, the contraction of lending was overdue. But the lending contraction will only go so far, and then the government printing press will overtake the contraction if not stopped.

Sounds like more government effort trying to prevent a needed correction after a bubble.

I read some articles that said large corporations are sitting on piles of capital waiting to see which direction the market is heading. They expect the recovery to be consumer lead. Other articles said we are in for a new round of merger's and acquisitons.

Diogenes wrote:While we are talking about invisible hands, what about the one i'm often going on about?

mene mene tekel upharsin.

Now a days the stats are published on the Internet. Walls are so passe.

hanelyp wrote:So the money supply contraction due to less lending is overtaking the money supply expansion from the 0bama regimes reckless spending. That would explain why we haven't seen rampant inflation yet. Given the excesses of lending in past decades, the contraction of lending was overdue. But the lending contraction will only go so far, and then the government printing press will overtake the contraction if not stopped.

Sounds like more government effort trying to prevent a needed correction after a bubble.

In a normal recovery, the credit market would be focused on lending to businesses that invested the capital into improving productivity, creating new products, etc... i.e. activities that have a positive return on investment, ergo you get economic growth.

In this "recovery" you have the credit markets supply being absorbed by the government, which blows the cash on keeping net negative productivity individuals employed, hence low economic growth and no employment expansion in the private sector.

Not to mention that the current crop of Keynesians are not even really Keynesians, I would call them neo-Keynesians.

Keynes said that the government should save money in good times in order to spend it to stimulate the economy in bad times. He was OK with temporary deficit spending, but I don't think he advocated going into the massive sorts of debts that Western countries have over the last couple of years.

The neo-Keynesians were in favor of expanding government spending during the last few decades of good times. Then, an economic crisis comes along and they want to spend even more, saying it's what Keynes would have done. While I may not agree with everything Keynes said, I think he was a much smarter man than those who pretend to be his disciples.