This is like when a public company stops reporting their balance sheets - how do you know what their stock is worth when you don't know how much they earn? Or, like when Saudi Arabia stops reporting accurate oil reserves - how do you know how much is left?

So how do you price US debt when they no longer report how much of it there is?

Wow! Is there a precedent for this? Is any other central bank on this planet doing something similar?

I mean just take a look at the development of M3 since the early nineties, it has been more blown up than my belly since I started becoming a beer addict!

So is it safe to say that the road to hyperinflation is set and ready?

They already had in Nov 2000. Excellent move financially, the euro went up and up from there.



UN page

Interesting link about US-"Funny money" (although the source is called "conspiracy nation", which is not really how shall I say...)

http://www.shout.net/~bigred/PhoneMon.htm

M3 are "long money". They don't float and because of that they don't matter to what Federal Reserve is doing and IMHO this is the reason why Federal Reserve is dropping M3. The chance of M3 floating is about the same as the chance of US Government debt being converted into the money and Federal Reserve was doing fine for many decades without reporting US Government debt, didn't they?

So there is no conspiracy or fear of Iranian oil bourse. M3 is largely irrelevant for money supply and money supply is what Federal Reserve regulate. Even despite eurodollars, M3 is largely irrelevant as far as inflation is concerned. After all, who cares about dollars stashed in mattresses in Russia, or dollars being held in China central bank with yuans printed against them? Those dollars would never come back and nobody would demand anything in exchange for them. They are leveraged in local economies/currencies and in worse case they would be recycled, but that is a subject on its own.



Also, again some people are scared with Iran opening oil bourse. First of all, they will not open it in March 2006. Second even if they would, it wouldn't be in Euro. Didn't you notice that Iran kinda started to realize that for a bourse to work a bit more then a pissing match with USA (and/or established system of dollar recycling) is needed? So they backed off from the idea of Euro denominated bourse and floated idea of a basket currency pricing? Come on, would you even consider anything like this within 6 months of bourse opening?

Sure, Iran has an overhead selling to Europe in USD, but so does Russia and former USSR. Who has more resources to start a bourse? Why didn't Russia do it? Didn't Russian learned early on that Euros are not recyclable? And now, who deals Iranian oil?

Anyhow, the problem Iran faces is either...
1. to quote in Euro and be illiquid and irrelevant and arbitraged to USD to... what is actually the reason for all that non-cense? to manage overhead? hmm, they are already doing it. So what? quote in Euro to cover trade with Europe and have overhead with trade with Asia, being illiquid and irrelevant....
2. to quote in basket to confuse everybody, be irrelevant, but cover balances with all trading partners...
3. quote in Gold or equivalent, which would make most sense from fundamental Islamic positions, but would make bourse illiquid and irrelevant.
4. to quote in USD, but is there a place for another USD denominated bourse?

Anyway you slice it, Iranian oil bourse is not happening and even if it would, it would be such a non-event financially, alas markets always have they own perception.

Every dollar in foreign hands is an IOU against the USA. If the number held overseas is irrelevant why did Nixon take the US off the Gold Standard ? At the end of the day the freely floating dollar is a tradable commodity just like any other. When demand for it drops then its value will fall and it will buy less in the way of other goods and services. The only resolution to that problem will be that the US either has to consume less or else it will print more of its currency to compensate. Should it adopt the second course then inflation will take off,

hey! i didn't write that

The M3 money supply measure is one of the most basic economic stats published by the Fed. The basic college macro economics college course always covers this along with the definitions of M1 and M2. This statistic has been published since 1959. This stat is widely followed by economists and investors all over the word.

Excluding all other information, the Fed deciding that it is no longer publishing this stat, strikes me as very, very strange. I can't figure out an explaination for it.

Linking this to the Iraq oil exchange and other potential economic events, is pure conjecture, but it does provide a plausible explanation as to why the Fed would decide that it no longer would publish the M3 stat.

Indeed it is strange. Decisions at that high a level in the government are never made on a whim. They obviously have a reason, and thus far seem to feel no need to inform the public. I'd say it's downright dishonest, but then again it's right in line with what we've seen from the Bush government.

Well, if this figure means nothing (or not very much) why has the Fed been posting it since 1959? And why, if it will no longer be published, are the financial markets not entitled to some explanation, like the one you just gave? I can understand Greenspan's famous opacity when it comes to making predictions about the economy, but to eliminate a major measurement without explanation strikes me as fishy.

It's been too long since I took my econ classes for me to comment on M1, M2, and M3, but...


I can comment on this. Shill bidding only works when you're selling a single item that has a hard to define price. That's why you hear it in reference to auctions. With shill bidding, your goal is to try and find out how much one or two people are willing to pay for a single item, and make them pay exactly that much.

You don't get that with a broad based market. The reason why Chevron's at $56.85/share is because a hundred people out there are willing to pay $56.85/share for it, but not a penny more, and another 5,000 are willing to pay some exact amount for it somewhere between $56.35 and $57.35. Shill bidding in a market like this would amount to a difference of a penny (or something like a "basis point"? I mostly trade stocks, but the fundamentals of buying/selling anything on a broad-based open market; whether it's a commodity, an equity, an option, or a bond remain pretty much the same for what we're talking about.) or so on a $100K bond.

We've really got a situation here where the federal government is buying and selling something more like stock than something on the auction block. And to be fair, large corporations issue stock and buy it back all the time. In theory, if the buyers and sellers in the market don't revalue the stock you're working with, if you sold 500,000 shares of stock that's widely traded and bought it back, you ought to break even (less commissions). Same here. If the federal government sells 500,000 T-Bills and then buys 400,000 of them back, it should wind up having the effect of the government only selling 100,000.


Deceit isn't anything unprecedented, by the way. We've had it in politics for thousands of years- ever since King Saul of Israel, at least. This level of deceit isn't even unprecedented in our own country.


You forget that if any other country had gotten attacked, civil liberties would have been thrown out the window. We gave up some of our privacy, but you'll note that the government has actually given up control on some issues. Take the assault weapons ban, for example. If the government really wanted to become a police state, it would be trying to take away any weapon people had, or at least renew a ban that helps keep military weapons like AK-47s out of the hands of the public. (I support the assault weapons ban, but cite it as evidence that 9/11 was more of an excuse for Bush to shove his agenda through Congress, rather than an excuse for the government to carry out conspiracies en-mass.)


Wait a sec. How did we get from secrecy at the Fed. Reserve to Terrorism? You aren't one of those left-wing conspiracy theorists who's convinced that the WTC bombing was carried out by the government, are you? I'm a slightly left-of-moderate, but that doesn't mean I still don't get a laugh out of conspiracy theories on both sides.


No. There is an agenda that's getting played out that basically says that you only matter if you're a rich (Male) White Anglo-Saxon Protestant. It's just another trend in politics that comes up once every 30-70 years, and we've had much worse in our country's history. Google "sedition act".


Or maybe we'll just wind up like Italy and buy a snack with a $1000 bill. Doesn't scare me; being a young person with a job at a nearly recession-immune drug company, I'll be able to afford that snack for a LONG time.


Let me guess; next thing you're going to say is that gold is worth nothing more than a shiny metal with a funny color. Currency only has meaning because it's something that people choose to assign value to and the availability of it can be controlled. As long as it looks like the federal government is going to be around and it isn't printing too much money, the dollar will remain relatively stable. The government doesn't have to turn into a police state to ensure confidence in its currency.


Maybe it's getting tougher and tougher to track in a global market. We can't track down the tens of millions of dollars Bin Ladin's hiding.

But, for the matter, something tells me that if the Fed. Reserve stopped publishing M1 or M2 data, everyone here would find some other (likely bigger) reason to crank up the doom meter, and everyone would be screaming "buy gold!" (Another completely worthless metal.) I'm sticking to oil, uranium, and railroad stocks. If I ever do pick up a metal, it'll be 3% U-235/97% U-238; the stuff that runs power plants. And for the matter, I think gold is one of the dumbest buys in the world. Buy platinum. Or silver. Or if you're a doomer who thinks he'll have to travel 500 miles on foot to avoid the government, buy silver replicas of $20 Double-Eagles and some gold paint. It's a lot cheaper, and if people are as dumb as some of the gold bugs claim they are, it won't make a difference.

If the doomer scenario hits, I'll be cashing my oil stocks in for silver. As annoying as it is to carry 10 lbs of silver around so I can have the equivalent of $2500, it's even more annoying to only be carrying around the equivalent of $200 bills. Even today it:
A) is annoying to try and find someone with change for it.
B) Screams, "I'm rich! Mug me!"

Hopefully responsible individuals are laughing as hard as I am at all this bunk. conspiracy...wooooooooo!

10 to 1that 99% of the posters had never heard of M3 money supply figures but within 24 hours they've been wooed by the cultists...woooooooo!

Thank you for coming out and saying more directly what I didn't quite have the guts to say. I will back you up on this one, however.

I find it odd that people who are making typos that show they've probably never seen words like "agenda" in a long time and hence haven't been reading too many newspapers feel qualified to talk about things as complicated as conspiracies to devalue currency at the fed.


Again, it's been a while since I took macro, but I at least remember enough to be pretty sure that M1 was the major statistic that economists used. Demand deposits, if I remember correctly, have the biggest impact on the economy and are among the first things to respond to changes in economic conditions.

I still haven't seen a reason to stop publishing the data. I'm assuming they won't stop Collecting the data, after all, who would plan monetary policy for a nation without all the available data they could get. So why stop publishing it unless it was really bad news? I mean, float an alternate senario for it, cause i'm not seeing it.

I'm glad our government is thinking of us and helping us daily with these small things, I wouldn't have know wether to print the M3 or not if someone would have asked, but I'm glad they know when they should print it or not.
that is so sweet! (Smooch*)

M3 tells us how much cash is in circulation, which has a everything to do with inflation. (Inflation is caused by Government printing money, that is the only cause)
M3 tells us how much has been made.

But thats not important I guess, unless you would want to track increasing inflation.
And who wants to do that? That would just cause trouble.