Speaking of Hell, all, and perhaps a near absolute economic failure Hell,
Do you know what creates a Bull market?
Do you know what creates a Bear Market?
What does economics and monetary policy have in common?
Where is the end of the Dow/Nasdaq decline?
At your finger tips is the world of economics data that allows you to analyze the coming events and the future of any economy. Is there a bubble in the economy that is being deflated. Hell no.
The US Federal Reserve Board measures the money supply using the following measures.
M1:Money that can be spent immediately. Includes cash, checking accounts, and NOW accounts.
M2:M1 + assets invested for the short term. These assets include money- market accounts and money-market mutual funds.
M3: M2 + big deposits. Big deposits include institutional money-market funds and agreements among banks.
a) The Ratio of M2/M1 is the flow of loose short term money.
b) The Ratio of M3/M1 is the flow of strong money
c) The Ratio of M3/M2 is the flow of Banking money.
C: is showing a slow down of banking money into M3 relative to the money of M2.
B: is showing huge investment into short term money market funds {a low investment into the actual markets}
A: is showing a increased saving level, or investment level relative to avaliable cash.
So what does it mean? It means that a lot of avaliable cash is being invested into money markets at this time, by the small investor. This has created an asset bubble in the treasuries. But the banks are actually investing money into the markets at a greatly reduced rate relative to small time investors. So money is being invested in the stock markets by the banks and not the small investors. This is the banks capailzation of low or under priced stocks, sold by funds to convert to money market funds for small investors. What does that mean. It means that until rates actually begin to move Higher in the USA the markets should go sideways or lower. The compelling reasons for the markets to climb aren't there. And as you know the small investor is a lemming. So where does the next bull market occur in USA? Well the M1 money supply rate has been removed in the last few months {year} and that is why the bear market has occurred. The M1 is loose money that searches for a home to go to, and often it finds it way quickly into the markets. To float the Markets or the economy, Greenspan need only increase M1 cash flows. This can be done many ways. But as a prude, he is holding back M1 supplies. There is no justification to due this. The USA economy is setting up for another 1994 bull market. This is your time NOW to capilize on USA Fed timing. It may not be a bottom, BUT I'M CALLING IT TODAY!
research.stlouisfed.org
If you want to see the charts, you can PM an email address. I shall not posts the charts, cause I believe that many here, just don't care. {must have Excel to view} |
