...yes it was, QwikSand (at least I think it was part of the period), and this will be another reason for the Fed to tighten...
Why? If the increase in the money supply was hand-crafted on purpose, rather than coming from inflation, why can't the Fed take it back out the same way they put it in, i.e., drain bank reserves with Open Market operations and messing with repo agreements? Yes, a 22% rate-of-increase in M3 would be a major fire drill for the fed if it was due to inflation, but there's no real evidence that it was (at least none that I've seen). PPI and other numbers before the meeting are likely to confirm that.
I have no doubt that Greenspan will try to make trouble, but I don't think he'll succeed to the point of a major correction. Plus, it's an election year which tends to act as a brake on the fed getting too aggressive.
In any event, most of my assets are in taxable accounts so I don't try to time the market. But even if I did, I think we go UP in January.
But of course, what do I know.
--QS |
