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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 (100912)	2/1/2009 9:50:45 AM
From: Real Man	Read Replies (2) \| Respond to of 110194

Yep. Trying to make the Titanic float again. The monetary measures such as velocity are distorted due to huge reserve pile-up at the Fed. They send weird signals. I guess one has to disregard. This piling of 1 Trillion in reserves at the Fed just withdrew that much from the economy. The adjusted base spiked, leading many (myself included) to believe the Fed is printing hand over fist. In fact, effectively the opposite just happened. They are printing, of course, but ... the short term effect was a huge drain and deflation. This money storage facility will have to come out. Not that the Fed meant it with their "paying interest on reserves" stuff. If they manage to kick it all out, velocity will pick up. -g- rgemonitor.com