In case you missed it, Mr. Moto has a new home page (but his message is the same<G>):
piraz.com
There has been no marked slowing in the money supply. I believe that, as you encounter the figures that follow, you'll see that the current U.S. inflationary activity should also not be expected to subside and time soon. This is, of course, excluding for what inflation there is currently in the prices of tradeable goods abroad.
I may leave the report a bit short this week as there are other items to which I must readily attend. Unless I do, I fear I may never complete what it is I've expected to provide here. That said, previous readers will recall the aberrations noted during the period surrounding the national tax deadline; but, otherwise, M2 continues to grow at a 5.5% annual rate with the transactional category, MZM, moving along at 6.7% -- still driving the economy along. I believe we will find shortly, though not too surprisingly, that recent estimates of economic growth have been understated. Repeating what I've stated in prior reports about period growth, the February-through-May stanza has M2 growing slightly above 6%. I should emphasize the periodic approach to determining trends and activity in the money aggregates, as well as the economy, because it is characteristic of the Federal Reserve to treat circumstances in just such a manner. Reviewing a few of the most noteworthy extents since the Spring of 1998 reveals a bit of this.
It's important to remember, too, that to cap growth is not the Fed's primary interest. At least not in the textbook sense. They are of course concerned about and attentive to growth in the economy, yet inflation is the primary target. I'm certain many may have read recent commentary that suggests inflation could continue even as the economy slows, which is possible. And, for this reason, many also worry that the Fed may go too far in pursuit of their prime policy objective -- price stability. But I don't believe we are currently in danger of even the slightest ruin.
It may have been in a report several weeks ago where I attempted to dispel notions of a Summer rally for the U.S. sharemarket. As a matter of fact, I was rather upset by reports that were spreading more hope than truth. Holding fast to what the monetary signals were, and are, I found those suggestions of galloping share prices entirely unbelievable. Selected issues? Yes, there are always those. But the inflationary background the market must now play before will either not permit the capital refueling with which the Street has grown so accustomed or be agitated to uncontrollable proportions.
Moto for Fed Chairman! |
