Saturday, November 19, 2005

Federal Reserve Will Conceal M-3 Monetary Aggregate To Hide Inflation

By Elaine Meinel Supkis

Stark memo with no mainstream press trumpets, the Fed decided they are fed up feeding us vital financial information. So they will simply hide it from us so we can't see how much money they are creating out of thin air.

From the Federal Reserve:
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).
So, they will still continue to show us large-denomination "time deposits"-- but they won't show their own contribution to this! You can bet in a year, even that will be hidden from view so the mooing herd of investors can't panic. You know, if you want to kill a lot of cows, you herd them in a large group into an ever tighter corral, smaller and smaller until each one is forced into the ramp that takes them into the slaughter house.

Restrictions, restrictions. Note the currency that will be hidden from view will be the euro. Can't let the Europeans see how the yen/dollar black hole operates. They must be kept guessing.

This news, and I look for this sort of news, slipped by like a thief in the night on 11/10 late in the day, the following day being a holiday and a weekend. This sort of bad news dump is what Bush and his Skull and Bones minions like Greenspan are addicted to doing. It is the "news black hole" they use when they don't want us to talk about something.

Google this information and up until today, you get very little.

Daily Kos caught this news:
First of all it's important to understand that the M3 report is the broadest measure of the supply of money in the economy.
Secondly, it is important to note that the M3 has literally doubled in less than 9 years. In other words, there is twice as many dollars out there than there while the economy has grown far less.
Lastly, it is important to understand what inflation actually is:
There is no inflation because of two forces: the Japanese have yoked the yen to the dollar in such a way that dollars will dissappear into Japanese government run banks to never see the light of day again, ie, it becomes a dead currency. It then morphs into loans, government and consumer, both way below the real rate of inflation. The Japanese have tricked their own people into believing they are in this tremendous depression which is a vast lie.

Japan has a huge trade surplus with the world. It is brimming with business. It dominates American industry even in America. So where is the depression? They aren't even cutting their retirement funds or cutting back on home spending. They are cementing over much of Japan's river banks and shoreline. They are doing just fine yet have only .01% interest rates.

This is insanity, of course.

Ever since Greenspan and Mr. Dollar in Japan discovered, back when the Bretton Woods Accords collapsed with the bust of the Japanese investment bubble, that the wreckage of that bubble could be concealed by "investing" in American governmental debts, it has been a fun ride, hasn't it?

Well, the numbers are insane now and going crazier by the hour. We passed the $8 trillion mark this fall and Congress is supposedly cutting budgets but they didn't, they increased the national debt even more, by the way, last night, after screaming at each other, they passed PAY RAISES for themselves, over $3000 worth! Way to go, Mr. and Mrs. Productivity! And they voted to continue the ruinous war in Iraq, too!

Further, during the Soviet Union dying years, they upped the value of the ruble by simply faking it, a ruble was set to be worth one deutschemark. Then the dollar fell apart in value and instead of buying 4 dm, it got only 1.6 dm. So the Russians discovered a gold mine as the forced people doing business with them to cough up the equivelent in dollars for worthless rubles! Suddenly, black market ruble sellers sprang up and the real value was established, in the end, at about 100 rubles to the dollar. Goods dissappeared from shelves and everyone wanted to sell directly to dollars instead of doing the lopsided exchanges.

The the Soviet Union collapsed into a financial heap. Just like we will in the end.

Aside from exporting our inflation into China where the goods return home, cleaned of dollar value, we have figured out how to tap the world of peasants to bring down costs here at home in domestic industries we can't export such as homebuilding, our big moneymaker this last five years.

We aren't seeing inflation at home because nearly all our homebuilders now are illegal aliens from Eastern Europe or Mexico (and increasingly, China). So it is cheaper and cheaper to build here. From CNN:
A raid by federal, state and local authorities at a Wal-Mart Stores construction site in Pennsylvania netted about 125 arrests for alleged immigration violations.

Schuylkill County Capt. Dennis Kane confirmed the raid to CNN. USA Today reported that the workers were working on a million-square-foot distribution center in eastern Pennsylvania.

Kane said immigrants who were arrested were taken to nearby Philadelphia. The county police worked in conjunction with Pennsylvania state police and federal immigration agents, he said.

Wal-Mart (Research) officials told the newspaper those arrested were employees of a subcontractor and that the nation's largest retailer has contracts with subcontractors requiring that they follow all federal, state and local laws.
It is pretty blatant now. Wages in the building trades collapsed some time ago which is why we are seeing a building boom. Cheap labor+expensive landrent=big profits for property owners. We outsourced our manufacturing while undercutting wages at home via workers who can't protest lower wages or even being paid at all.

Witness the ones in New Orleans, deported whenever they demand full wages!

Keeping the fiction of zero inflation going is getting much trickier now. I see prices in grocery stores climbing relentlessly. Building materials, ditto. The raw business numbers look great if you pretend there is no inflation, say, up 3%, for example. Well, this is part of the huge lie. That 3% increase in consumer spending is inflation. They aren't buying more, they are spending more for less!


I know I am. I have to stretch dollars more and more and it is pissing me off. People on fixed incomes are in terrible pain because the pretense there is no inflation means robbing them of their inflation hikes. The Fed already screwed around with those numbers by excluding the outliers of inflation: food, medicine and energy. This troika always shows inflation first because you can't evade them. You can avoid buying other stuff which falls in value as people stop buying them because of inflation in the essentials!

And free trade: gads! It is killing us. It is a total, unmitigated disaster. So of course, in China, Bush declares he will increase free trade and hide the effects even more.

When will we have our very own IMF riots? When? (After March 20, 2006, I am betting)

To return to homepage click here
To read more financial news click here

Links to this post:

Create a Link

<< Home