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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (178)	9/25/1998 4:14:00 AM
From: ahhaha	Read Replies (1) \| Respond to of 2794

I suggest you take a look at the M2 numbers and tell me what you annualize the rate to be. The average weekly increase in the last eight weeks has been $13 billion. That's 100 billion on a base of 4000. 2.5% per 2 months and rising incrementally. Trailing 15%. Exponentiating to at least 20% given the recent increments. In the first half of the year direct injections plus RP free float haven't been half of what they have been since mid July. Against a firm fed funds rate expressing good demand for inter bank funds the FED has conducted the RP actions with no softness. The fed fund rate jumps right back up after RP transactions. The recent daily direct purchases of bills and coupons haven't done much to dent the demand. They can post a lower rate, but they will have to defend it it by even more vigorous action.

To: Frodo Baxter who wrote (178)	9/25/1998 4:20:00 AM
From: Zardoz	Respond to of 2794

"The FED has already been pumping like there is no tomorrow. They have been doing this in ever increasing quantities for months. The consequence is an exploding money supply currently rising at something in excess of 20%." Allow me to BUT in Lawrence:{reply to ahhaha} Although the FED has been pumping M2 at a large rate they have slowed down from their previous fast pace. If you look at the following chart: mypage.direct.ca You'll see that M2 has almost always climbed. But the rate MACD{M2} has decreased rapidly from the highs. If you look at the second red mark, you'll see that that peak occurred on April 22 1998. Which is when the M2 rate started to decrease. This is a removal of liquidity by the FED, and correlates to the beginning of the bear market. Remeber 1987. The crash occurred 1 week prior to the first RED line. After the line, you can see that the US FED immediatley increased M2 rate. This was the famous ADDING liquidity. So what is the difference between than, and now? M1, interest rates, and {You figure out the fourth variable, Cause I won't answer all the questions} The crash occurred because the markets never corrected from the M2 rate decrease, because the interest rates held the market high. Start at this site: stls.frb.org Now, for the $10,000 question. Where is GOLD going. Plot M2 versus GOLD. And than add a little CPI in the mix. Woops. And than add the currency distribution for the G7. Toss it around, and down goes gold. PS: How come the LTC didn't see a correction coming. I posted it a long time ago. Obvious Egg heads, stare at the obvious, and miss the sublime.