This should be illegal.

OMG- I think somethings up and I'm NOT a doomer!
M3 has declined for the last 3 months at a rate not seen before, couple that with the unprecedented failure of last weeks 10 yr. t-bill auction to attract bidders means that the FEd is getting ready to MASSIVELY increase M3 and with no published figures it will make it easier to disguise the new funny money's journey from the printing press to the bond markets.

Got Gold?

History has shown that Americans prefure to pay for their wars through (cranking up the printing press)/inflation rather then taxes. And since we'll be in a state of perpetual warfare from now until bankruptcy you can bet your last dollar it'll be worth less in the future.

hmmm is that worth less OR worthless???

M1, M2, and M3 are measures of the quantity of money, in this case dollars. The measures each include different categories of money. M1 is the most restrictive; M3 is the most inclusive. M3 includes offshore dollar deposits (AKA eurodollars). Petrodollars are just eurodollars held by oil producers.

There are two definitions for inflation. The one the layman is most familiar with is an increase in prices. Another definition is an increase in the money supply in excess of the real increase in the size of the economy (which tends to raise prices, either of assets such as real estate or of consumer goods). Hyperinflation is just when inflation spirals out of control, like in Germany in the 1920s, when housewives pushed shopping carts full of paper money to the bakery to buy a loaf of bread.

The idea here is that the Federal Reserve Bank is suppressing the M3 measure of money because they want to conceal sharp changes in the number of dollars held overseas, for example if foreign central banks start dumping their dollar reserves, which they might do as a result of the following developments, among others:

1) The US economy slides into recession by spring of 2006, the Fed lowers interest rates sharply, and the value of the dollar drops sharply against other currencies (since people are holding dollars mainly because they can get a better interest rate in the US than in most other countries with apparently sound banking systems).

2) Iran opens its oil bourse, where people can buy and sell gold in euros, and it is such a success that foreign central banks no longer see a need to hold dollars to safeguard their ability to import oil.

The combination of 1) and 2) would be particularly disastrous for the dollar.

The result would be sharply rising import prices in the US (sharply rising prices in general) and probably recession. The likely Fed response would be to print money in an attempt to push the US out of recession. This, however, would be likely only to make matters worse and could lead to hyperinflation.

Or, the Fed foresees recession and plans to print money by buying US government debt (Treasury notes), which would force down interest rates in an effort to get US consumers to take on more debt. This would sustain the consumption of imports and the trade deficit, which would send MORE dollars overseas, dramatically increasing M3. This outcome would also mean inflation, but it would manifest itself mainly in further asset bubbles (a revival of the real estate and stock market bubbles, mainly).

I believe that this strategy would fail either because consumers will no longer be solvent and able to take on more debt after this winter's shocks to their budgets, or, if enough do remain solvent, because this strategy will boost economic activity in both the US and the many countries that export to the US, which will again push up the price of oil to the point where US consumers are no longer solvent.

However, the bankers at the Fed seem to be masters of wishful thinking, and they figure that if they can keep the public from knowing about alarming developments in the money supply, they will be able to keep the party going at least long enough for the big players to buy up gold or other real assets, leaving ordinary consumers, and probably countries that rely on the US consumer market (e.g. China), to deal with the wreckage.

Interesting! But, notice the date:

Discontinuance of M3

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).


The date is 3 days after the Iranian Oil Bourse becomes a reality. Is there a connection? Is this meant to try and prevent a collapse of the dollar in the days following the switch to the euro as Iran's oil currency? The timing is more then just coincidental.

Notice the inclusion of the Eurodollar. Now, for those not familiar with this term, it is not the same as the euro even though some erroneously call the euro a euro dollar. The Eurodollar is an American dollar held by a foreign institution outside the U.S., usually a bank in Europe, often as a result of payments made to overseas companies for merchandise.

Does anyone know how long the M3 stat has been published?

I think it is for decades. How can you have an economic statistic that has been published for decades simply decided that it will no longer be published? Something is really funny here.

The Enronification of the US is nearly complete.

I checked the Fed site. The M3 stat went back to 1959. 46 years.

Why stop publishing now????

Stopping publication of the M3 stat would not prevent a collapse, but it would help hide it.

To hide the truth. Maybe they have to now provide real figures instead of doctored up ones. Can you imagine what the US would do if they had to publish the true growth and unemployment figures? They stop publishing those too.

I might be mistaken, but I believe Saddam Hussein was about to start accepting euros for oil, right before we invaded them...

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I think gold bugs should stop posting their recomendations after all your position is fundamentally biased- the only action that improves your situation is if more people buy gold- buy your gold and be smug and silent in your beliefs please. Gold bugs are like Amway salesmen- they don't win unless they get 24 other suckers below them to support the pyramid....

Well said. The Peak cultists are cranking up their doomerosity meter.

this M3 discussion is about the most ridiculous I've read on Peak Oil.

care to give a reason for that? what legitimate reason does the fed have for not publishing M3 data?