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

To: bart13 who wrote (85837)	9/3/2007 8:03:33 AM
From: stan_hughes	Read Replies (1) \| Respond to of 110194

Thanks for your work on that -- I thought the piece in question was intriguing, but a bit too simple -- I can also now plainly see from your second chart that the mid to late 1990s was a period where the axiom doesn't/didn't hold. That greatly lessens the predictive value of any M1 growth decline premise for me, although it does perhaps give some weight to the notion that it was Greenspan intervention that temporarily arrested what perhaps should have happened in the latter 1990s but instead was shifted to the right. Unfortunately none of this adequately speaks to developing a useful trading tool using M1, i.e. how far down the chart does M1 growth have to slide before a serious national recession bites -- based on that graph, it could be 1, 2, 3 or more years out (if we even get one at all for sure), plus there's no way of knowing how the Fed might behave to try and forestall such things, or what the market's reaction to their efforts might be. So, as reliable predictors go, methinks it's back to the drawing board for this one