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

To: Tommaso who wrote (45494)	11/14/2005 4:50:39 PM
From: Lhn5	Respond to of 110194

<<The comment to which you are replying also assumes incorrectly that when the banking system creates money, or even when the Federal Reserve creates money, it is literally printing bills.>> I misunderstood what that author was saying and also did not make my post clear enough. Best thing at this point is make believe none of it ever happened. I understand what you are saying.

To: Tommaso who wrote (45494)	11/14/2005 8:39:36 PM
From: Elroy Jetson	Respond to of 110194

Let me bring you up to date. Printed currency is only included in MZM when the Fed sends it to a bank -- the currency is now in circulation and now money. Being "in circulation" does not mean it must be actively changing hands as you imagined in your child-like way. The Federal Reserve may have a trillion dollars printed, stacked and banded ready for distribution in an emergency -- yet this is not money, even though Win Loser Draw believes it is. It become money only when the Fed takes it out of the vault and puts it into circulation. When the Fed sends currency to the central bank in another nation, this is not included in MZM, but it is included in M3. It seems you may have been as confused on this point as Win Loser Draw. When the Fed makes a trillion dollar swap to prevent Fannie Mae from collapsing -- that would have shown up in M3 had it not been discontinued. The bottom line is discontinuing publication of M3 is quite grave in consequence. Ninnies may not see the significance, but they rarely do. .