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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 (3525)	12/17/2003 11:48:29 AM
From: ild	Read Replies (2) \| Respond to of 110194

Date: Wed Dec 17 2003 10:39 trotsky (@falling money supply) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there's no mystery there. bank assets are declining - industrial and commercial lending has been contracting for 3 years, and now the mortgage credit bubble has simply stopped dead as well. since 'money' in the fiat system is only added with the help of fresh debt creation, its supply tends to begin to shrink when the credit expansion for whatever reason stops ( in this case: industrial overcapacities & higher mortgage rates ) . the HUGE existing debt mountain therefore also represents the major argument supporting the idea that the coming economic downturn will be deflationary in nature. 'money' will be destroyed on account of defaults, and consequently, the money supply should then shrink further. also, the savings-starved private sector will attempt to build up cash balances - this liquidity preference is also set to contribute to the deflation ( i.e., the 'price' deflation, since goods purchases will be continually deferred. the current weak X-mas shopping seaon is a small foretaste of what's in store in the future ) . no wonder the bond market is rallying gain - it KNOWS. Date: Wed Dec 17 2003 10:49 trotsky (Pit Yorlie, 7:54) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved please note that the alleged Japanese 'growth' is entirely explicable by the recent introduction of hedonic indexing to Japan's economic statistics. iow, it's only a statistical phenomenon now, similar to US 'growth'. big declines in IT spending end up as big increases in the new era GDP accounts. however, the reality is quite different. note that in a deflationary slow-motion collapse like Japan's, hedonic indexing tends to introduce especially large distortions to the numbers, due to the bigger 'deflator'. so the Japanese are now also counting money that no-one ever spent or received as part of their GDP. it's all smoke and mirrors.

To: russwinter who wrote (3525)	12/17/2003 12:13:10 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

I am trying to pick up a cheap July crude call but they will not give it to me. ng M

To: russwinter who wrote (3525)	12/17/2003 12:22:29 PM
From: mishedlo	Read Replies (2) \| Respond to of 110194

M2 M3 mises.org The yearly rate of growth of money M2 fell to 5.2% in November from 7.5% in October while the yearly rate of growth of money M3 fell to 4.7% in November from 7.5% in the previous month. How seriously should one take the recent softening in the yearly rate of growth of money supply? Some analysts believe that this softening in the growth momentum could cause problems for financial markets since a fall in the rate of growth implies that the pace of liquidity generation is slowing down. It is also held that a softening in the growth momentum is likely to hurt economic activity. Economists who follow money supply data are also alarmed by the fact that the growth momentum of commercial bank lending is displaying a visible decline. After climbing to 12.1% in June, the yearly rate of growth of commercial bank loans fell to 6.6% in November. Does the slowdown in the money and credit rate of growth imply trouble ahead? ... Now, it is true that the popular definitions of money are also showing a decline in their growth momentum. However, as we have shown, one cannot rely on these definitions since they provide a misleading account of what money supply is. In the following charts one can observe the discrepancies in the growth momentum of popular definitions of money against money AMS. Now, even if popular definitions were to produce good historical correlations with various economic data, one runs the risk that these monetary measures will lead to misleading analyses on account of the fact that these definitions are flawed. The only criterion of having confidence in a money supply definition is whether it correctly identifies what money is and where it resides.

To: russwinter who wrote (3525)	12/17/2003 12:46:13 PM
From: Jim Willie CB	Read Replies (2) \| Respond to of 110194

I give importance to OPEC comments on weak US$ that signaled a speculative rush into crude oil and natgas before 2004 is too far along, I expect much more open talk and actual defiance in pricing oil in euro denomination the Arab and MidEast world does most of their commerce with Europe and takes in money from American sources they are losing badly in the dollar slippage progression my portfolio is now more energy weighted than precmetals / jim