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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (16382)	11/20/2004 3:12:03 AM
From: Elroy Jetson	Respond to of 116555

I would expect the market to follow the model. Calculating the "first derivative" of any line gives you what we might call the "rate of change" or "rate of acceleration" for that line. The rate of acceleration of the Money Supply is not the Money Supply. However, it does highlight changes in the money supply that are not that noticeable in the chart of the money supply itself. As a consequence the "rate of change" in the money supply can be a powerful predictive tool in a Monetarist Economy. We can even add some additional tweaks to the calculation, as Frank Shostok has done, to try to make it even more predictive. home.pacbell.net But a decline in the first derivative of the Money Supply is still not a decline in the money supply. The money supply is not declining. The Fed would be terrified if the money supply was actually declining. It would probably mean that their sorry debt-world economy was in an irreversible spiral. .