If I have traced this article correctly it adds
"The M3 data measures both cash and a wide range of bank instruments. It tends to provide an early warning signal of major shifts in the economy, although the US Federal Reserve took the controversial decision to stop reporting the statistics in 2005 on the grounds that the modern financial system had rendered the data obsolete." referring to "On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. ... M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits." Arguably if the elasticity of credit suddenly dries up, because it has become on the margin of viability, it is rational for private credit to be replaced at least temporarily with public credit? Credit fundamentally means trust. It is a social entity, closely related to exchange value? It should therefore be publicly underwritten if necessary or desirable. The terms for doing so are a matter of politics. These arguments also apply on a world scale. Chris Burford London ----- Original Message ----- From: "Jim Devine" <[EMAIL PROTECTED]> To: "Progressive Economics" <[email protected]> Sent: Saturday, September 27, 2008 9:56 PM Subject: Re: [Pen-l] What's the total amount of money in the whole world ? one big problem is that the Federal Reserve has almost no control over M3. And its magnitude, like those of other measures of the money supply, is to a large extent determined by the economy's dynamics rather than _vice versa_. > Sharp US money supply contraction points to Wall Street crunch ahead > Ambrose Evans-Pritchard > Financial Times, Last Updated: 12:01AM BST 23 Aug 2008 > > The US money supply has experienced the sharpest contraction in modern > history, heightening the risk of a Wall Street crunch and a severe > economic slowdown in coming months. > Data compiled by Lombard Street Research shows that the M3 ''broad > money" aggregates fell by almost $50bn (£26.8bn) in July, the biggest > one-month fall since modern records began in 1959. -- Jim Devine / "Nobody told me there'd be days like these / Strange days indeed -- most peculiar, mama." -- JL. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
