Tip, I think what the author calls the slowing of M3 is really people selling money market shares to buy stocks. Yes, that is a bad indicator of an unbalanced economy, but it is not a good indicator of a business slowdown, IMHO.
He is absolutely right about credit. The Fed is making it easy, but the banks are mostly taking care of old disasters, not lending to new ones. The stock market is funding the internut scams, so they don't need the banks. All other bad credits, other than derivatives, of course, are going to have to go pound sand. And that is bad for GDP and employment.
So, I guess I am agreeing with his conclusion about a slowing, but I disagree that lower M3 growth is one of the reasons.
I don't see how services are any more susceptible to slowdowns than basic industry. Or any less. I don't buy into that argument.
He may be overreacting a bit. Gold Eagle is, after all, written by and for the bunker crowd. So, he is like an actor over emoting to an audience of frat rats at a college. He wouldn't necessarily play the scene the same way on Broadway.
But I do think that these Chicken Littles are right to warn about the recklessness of the banks and the Fed. We may sneak buy without a depression, but it will be one humdinger of a recession after so much speculative activity.
MB |
