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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Nihontochicken who wrote (8059)	2/26/2008 1:36:57 AM
From: RJA_	Respond to of 50182

>>Aw, c'mon, after all this build up, and it simply comes down to money supply (whichever flavor of M you pick, as long as it includes credit creation), that many people have been posting here for years????? Just the facts, Ma'am. If you want drama, watch the soaps.

To: Nihontochicken who wrote (8059)	2/26/2008 6:17:10 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 50182

re: ["Aw, c'mon, after all this build up, and it simply comes down to money supply (whichever flavor of M you pick, as long as it includes credit creation), that many people have been posting here for years????? "] You missed the point entirely. This massive broad rally in commodities over the last couple of weeks had nothing to do with MZM, M1, M2, or reconstructed M3 charts. And you are 100% right - those charts are old news... and the market does not trade, let alone break out to new all time highs - on old news. Bernanke has actually slowed the pace of money supply growth. Hence the current arguement about deflation vs. inflation. My point on the M1, M2, M3 and MZM charts is that a massive amount of money is still working it's way through the global system. Much of it was misallocated into paper instruments that have blown up, and now it's being reallocated into hard assets like commodites and gold. The catalyst of this move was not about what the Fed has done in the past - but rather about what the Fed is going to do in the future. Markets are always forward looking. The catalyst for this move was the removal of a headline agenda item at the February 8th & 9th G-7 meeting - "Dollar Stabilization." It signaled the Fed's future actions and the future direction of the U.S. Dollar and Dollar policy. Hedge funds poured massive amounts of new money, broadly into commodities, not just gold - on that news. Look at what happened in just the first two weeks, post the G-7 meeting: My other point, is that the real story on money supply is not a US story, it's a global story. 18 of the 20 largest central banks are increasing money supply at double digit rates. The removal of "Dollar Stabilization" from the G-7 Agenda was a major market "signal" on where the Fed is going. And the market just voted for inflation - not deflation. I hope that clears things up. S.O.T.B.