Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: NOW who wrote (72048)	12/8/2007 3:13:11 AM
From: Real Man	Read Replies (2) of 116555

This is our current financial pyramid. Broad money, the second lowest layer, is growing 18% to compensate for ongoing derivative bomb collapse in the area of securitized debt and financial derivatives. So far the Fed's effort to pump the second layer, M3, has succeeded in preventing the collapse of this structure. But to say that cash is abundant in these markets is to ignore the third and the fourth layer entirely. However, note that the second and the third layer of the structure are EQUAL in size. Thus, higher and higher M3 growth is required to keep the inverted financial pyramid from collapsing. Overall, we have a huge mess, with both inflationary and deflationary forces playing against each other. Got hyperstagflation? -g-

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