Stalin
Well-Known Member
- Joined
- Apr 4, 2008
- Messages
- 2,315
Seasoned watchers of the US federal debt and tax revenues were not the least surprised when the Fed suspended use of M3. The Reason ? The US government is cranking up the printing presses and using the US dollar's unique position as the locomotive currency, exporting inflation. M3 would demonstate this fact in spades, so it had to go.
However, it can be recast from available data, and not surprisingly, points the finger at the gulty parties...
"...We did some sleuthing and data extraction and put M3 back together from various weekly Federal Reserve reports that are still available.
The formula we're using has five 9s correlation to the original data back to 1980.
There is only one missing element that is apparently no longer available (Eurodollars) and an adjustment has been applied to generate it. Its only about 3% of total M3 so should not have a material effect on the total.
11/30/2007 - Note that much of the large growth in M3 lately has been in flows into CDs and Money Market Funds, a normal occurrence during financial turmoil. See our financial crisis page for more detail, and a picture of the current level of a U.S. financial crisis.
3/31/2008 - Also see our best effort construction of all Fed activities here. As of today, it shows that the Fed has been backing off on total money creation activities on a relative basis since about December 2007.
4/4/2008 - As of 3/19/2008, we have added the results of the new Fed TAF, TSLF and PDCF "tools" to our M3 reconstruction, since they are quite similar to temporary repos (repurchase agreements). Temp repos are part of the original definition of M3.
Here is our article on M3b, which details our work and notes the sources for the data. Note that as of Nov. 10, 2006 the Eurodollar estimation formula has changed - see the article for details.
John Williams monthly reconstruction of M3 is here. Ours tends to be more volatile and averages slightly higher than his, partly because it's weekly and partly because of our minor differences in calculating the Eurodollar component of M3 and repos...."
http://www.nowandfutures.com/key_stats.html
However, it can be recast from available data, and not surprisingly, points the finger at the gulty parties...
"...We did some sleuthing and data extraction and put M3 back together from various weekly Federal Reserve reports that are still available.
The formula we're using has five 9s correlation to the original data back to 1980.
There is only one missing element that is apparently no longer available (Eurodollars) and an adjustment has been applied to generate it. Its only about 3% of total M3 so should not have a material effect on the total.
11/30/2007 - Note that much of the large growth in M3 lately has been in flows into CDs and Money Market Funds, a normal occurrence during financial turmoil. See our financial crisis page for more detail, and a picture of the current level of a U.S. financial crisis.
3/31/2008 - Also see our best effort construction of all Fed activities here. As of today, it shows that the Fed has been backing off on total money creation activities on a relative basis since about December 2007.
4/4/2008 - As of 3/19/2008, we have added the results of the new Fed TAF, TSLF and PDCF "tools" to our M3 reconstruction, since they are quite similar to temporary repos (repurchase agreements). Temp repos are part of the original definition of M3.
Here is our article on M3b, which details our work and notes the sources for the data. Note that as of Nov. 10, 2006 the Eurodollar estimation formula has changed - see the article for details.
John Williams monthly reconstruction of M3 is here. Ours tends to be more volatile and averages slightly higher than his, partly because it's weekly and partly because of our minor differences in calculating the Eurodollar component of M3 and repos...."
http://www.nowandfutures.com/key_stats.html
