Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: mishedlo who wrote (16515)	11/21/2004 9:05:06 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

The Dollar Deluge On the cover of Newsweek [too funny since I talked about this just hours ago] The Bush team signals that its 'strong dollar' policy will be a reflection of its military policy: ideological and unilateral. msnbc.msn.com

To: mishedlo who wrote (16515)	11/21/2004 9:12:14 PM
From: Elroy Jetson	Respond to of 116555

The real question to ask is, "why did MZM expand so quickly during 2001?" This rate-of-change measurement is shown in red. economagic.com 1.) One answer would be, during 2001 many moved from investments into short-term liquid investments, which shows up in MZM. Obviously people should have made the move in 1999 or 2000 rather than 2001, but that's people. 2.) Another answer might be, a surge of cash-out home re-financings occurred in 2001. The debt of the increased mortgage adds to the "money supply" while the check for the cash shows up in MZM. Why has MZM been expanding more slowly since 2001, as shown by the red declining rate-of-change line? a.) One obvious answer might be, fewer cash-out home mortgage re-financings are occurring, or the amount available to be cashed out is smaller. That certainly has a ring of truth to it. b.) Another answer would be, since 2001 interest rates on readily available cash equivalents (the sort MZM measures) have become abusively low, causing people to move to other investments. This certainly sounds like the Evening Newspaper. c.) Another answer would be that fear has declined since 2001 and people now place their money in investments not measured by MZM. (or maybe their fear of low interest rates for savers has grown stronger) .