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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (50)	6/16/2003 12:56:33 PM
From: ild	Read Replies (2) \| Respond to of 110194

Bernanke Has Got The Printing Presses Running Overtime June 13, 2003 Remember back in November when Fed Governor Bernanke said that the Fed could crank up the monetary printing press, if necessary, to stave off deflation? Well, by design or not, the currency printing press is running at its highest speed since September 2001. As the chart below shows, in the eight weeks ended June 4, the M2 money supply grew at an annualized rate of 17.85%. Of course, the reason for this spike in money growth is the Fed's signal to leveraged investors, banks in particular, to borrow all they want at the fed funds rate of 1-1/4%, or less come June 25, and lend those funds farther out along the yield curve without fear of a near-term increase in the funds rate. And banks have responded by purchasing billions of securities. And now, the renewed mortgage frenzy is starting to show up on the books of banks. I am not aware of any deflationary period in recorded history coming on the heels of 17.85% money growth. Chart at the link: northerntrust.com