THE Federal Reserve Thread pt 1 (merged)

[Daculling]

Some states offer in-state tution for illegals... why the hell wouldn't we give them houses too?

Lookup the Dream Act

[jimmydean]

Isn't Bush also hoping to give illegals work cards? LOL

As if there isn't enough cheap labour competition with the east now removing jobs this is just ridiculous.

[lyrl]

I think the Fed is doing the best it can to aim the housing bubble toward a 'controlled detonation'.

In theory, raising interest rates should make mortgages harder to get, which should make speculation more difficult.

Of course, raising interest rates will also make consumer debt more difficult to manage. And decreased spending resulting from lessening of the consumer debt will hurt our current growth-dependent economy.

So the Fed is walking a tightrope here.

Whether they will be sucessful or not I don't know. Economy manipulation is pretty much all experimental.

On giving home loans to illegal aliens, that's been going on for years. The banks have found that they're a good loan risk - illegal aliens are actually less likely to default than some groups of debt-happy citizens. I think that says more about the unhealthy American attitude towards finances than about the bank's morals.

[agmart]

Raise interest rates
Tip the economy into recession
Demand drops
Oil prices fall
What peak oil, there is no peak oil

[EnergySpin]

Raise interest rates
Tip the economy into recession
Demand drops
Oil prices fall
What peak oil, there is no peak oil

This might be a much safer alternative for a peaceful powerdown.
They are not doing it for this though; FED is trying to prevent the Japs/Chinese/Europeans/Asians from pulling the plug overnight

[Falstaff]

http://www.federalreserve.gov/releases/h6/discm3.htm

Why? Why now? How can hiding this data help their cause?

[dbarberic]

I find this quite disturbing.

M3 is one way to monitor inflation in both currency and credit markets. My guess is that someone does not want others to know what they are doing.

[dbarberic]

I did some research and put my dedective hat on.

One of the two key differences between M3 and M1 & M2 is that M3 includes Eurodollar deposits. Eurodollars are deposits denominated in United States dollar at banks outside the United States.

The M3 Stat will end be published near the end of March, 2006.

The Asia Times Online has reported "Iran has recently announced that the new oil exchange will start up its computers in March 2006".

If Iran goes through with the oil exchanged priced in Euros, foreign banks will be dumping USD$ for Euros. This should make the M3 trend line drop like a rock.

My guess is that someone does not want the investing public to know this (both foreign and domestic).

[richardmmm]

more to it that just that...........

if you are pumping liquidity into the system and you need to pull some of it out to prevent hyperinflation, then without M3, you can hide it away now in offshore accounts for later use, or just scrub it altogether.

it's a scandle what the fed have done to money.

did you know that the fed buy US gov. treasuries, which basically amounts to shill bidding on the gov. auctions for treasuries.

there is so much deceipt going on, they have got away with it thus far, why not just stop publishing the details altogether.

the whole terrorism thing is obviously more about people control, far more than it is really about any real terrorism. after all a few guys running about the US after 911 letting off car bombs in every major city, could have brought the country to it's knees, but there was no real follow up ??

why not ??

after such a major attack it would have only taken a couple of dozen smaller ones over the next few weeks to have the whole US in an absolute mess.

there is obviously an adgenda being played out that requires more stringent controls over peoples activities and now that any person could be arrested and branded as a terrorist and held without trial for weeks and weeks, we are entering a situation not unlike communist russia where any opposition to the status quo can simply be branded and locked up.

terrorist or political prisioner ? the dividing line is pretty close ?

the situation of a debased currency has now been running for 30+ years and the governments obviously realise that crunch time is coming and once the people realise that their money is simply pieces of paper, that are basically worthless and based only on a trust that has been absolutely violated, then the governments realise the need to contorl and hide things more and more.

a dollar bill or british pound or euro is really worth no more than a piece of white paper that I write a value on with a biro, and a bank account is worth nothing more than an account on a server with some zeros in it.

the value of the paper money is meaningless without something concrete behind it.

[jaws]

So much for transparency Ben Bernanke.

[UIUCstudent01]

I did some research and put my dedective hat on.

One of the two key differences between M3 and M1 & M2 is that M3 includes Eurodollar deposits. Eurodollars are deposits denominated in United States dollar at banks outside the United States.

The M3 Stat will end be published near the end of March, 2006.

The Asia Times Online has reported "Iran has recently announced that the new oil exchange will start up its computers in March 2006".

If Iran goes through with the oil exchanged priced in Euros, foreign banks will be dumping USD$ for Euros. This should make the M3 trend line drop like a rock.

My guess is that someone does not want the investing public to know this (both foreign and domestic).

So what does that mean exactly to a neophyte?

Inflation? Hyperinflation? Devaluation of the dollar? Destruction of the 'Petrodollar'? What?

(I don't even know what this M1, M2, and M3 line business is about..? Wikipedia isn't very helpful to someone who hasn't taken Macroeconomics... and it also doesn't tell me what happens when these lines fall like a rock...)

In short, connect the dots for me and tell me what exactly to make of this? (And others?) (What does it mean? What does it NOT mean? Any mitigating factors for what is to come?)

[lotrfan55345]

This should be illegal.

[hoplite]

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.

[cube]

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???

[MonteQuest]

(I don't even know what this M1, M2, and M3 line business is about..? Wikipedia isn't very helpful to someone who hasn't taken Macroeconomics... and it also doesn't tell me what happens when these lines fall like a rock...)

As to M1, M2, M3:

M1: Technically defined this is the sum of: the tender that is held outside banks, travelers checks, checking accounts (but not demand deposits), minus the amount of money in the Federal Reserve float.

M2: The sum of: M1, savings deposits (this would include money market accounts from which no checks can be written), small denomination time deposits (where small is less than $100,000), retirement accounts.

M3: M2 plus the large time deposits (for any of you with more than $100,000 deposits you add to this...). Eurodollar deposits, dollars held at foreign offices of U.S. banks, and institutional money market funds.

[marko]

So what does that mean exactly to a neophyte?

Inflation? Hyperinflation? Devaluation of the dollar? Destruction of the 'Petrodollar'? What?

(I don't even know what this M1, M2, and M3 line business is about.)

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.

[Euric]

http://www.federalreserve.gov/releases/h6/discm3.htm

Why? Why now? How can hiding this data help their cause?

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.

[dbarberic]

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.

[rogerhb]

The Enronification of the US is nearly complete.

[dbarberic]

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

Why stop publishing now????