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Monday, April 07, 2008

M3 and MZM and Gold Price

Shadowstats.com updated their reconstructed M3 supply of US dollars on April 5th. It is growing at an annualized rate of just under 18%:
http://www.shadowstats.com/alternate_data

Nowandfutures.com's latest reconstructed M3 growth rate of supply of US dollars is about 19 1/2%:
The Fed stopped publishing the numbers early 2006. They must have known how bad they would be making the growth rate.










The MZM supply of US dollars at over 37% is looking terrible, too: http://research.stlouisfed.org/publications/usfd/page5.pdf






















Here is the USD since 1971. The world gets/understands the increase in supply of the dollar thus it's decrease in value. Shorting the USD which is the equivalent of going long gold and silver: a no brainer.






Tidbit:

The Assault On Free Markets
By Peter Schiff
http://www.gold-eagle.com/editorials_08/schiff040408.html

"...
Those blindsided by the recent financial meltdown are now loudly blaming the free market for its failure to police its own excesses, and are calling for greater regulation to prevent future disasters. But for those who clearly observed the problems developing (in high definition slow motion) the blame can be directed squarely at the policies of the Greenspan/Bernanke Federal Reserve. As has been the case countless times in history, the free market will now pay the price for government incompetence.
...
A perfect illustration of the Fed’s failure to take responsibility can be found in Bernanke’s explanations regarding inflation, which he solely attributes to the effects of the rapid increase in global commodity prices.
...
Rather than accepting the blame for creating inflation, Bernanke is shifting the blame to the free market. The Senators are happy to let him get away with it as it provides more evidence to support the “need “ for more government to save the economy from the disastrous effects of unbridled capitalism.
...
While Bernanke talked about the underlying strength of our economy, he claimed necessity in saving Bear Stearns from bankruptcy as it would have brought down our entire financial system.
...

[Then there could not have been underlying strength to the economy if one lousy investment house could bring down the whole economy and/or it is being used as an excuse for more government power/control over businesses and the economy. We know what that led to in the USSR; famine and self-implosion/break up.]

... as the Fed uses inflation to rob Main Street to pay off Wall Street."


*******

Gold and silver are assets *** outside *** the financial system. They are relatively safe stores of value, unless a government makes it illegal to own gold and silver, which is something a president of the US did in 1933.

"... The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. ... This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights." - Gold and Economic Freedom, Alan Greenspan, 1966

The M3 and MZM supply numbers indicate much higher USD gold and silver prices.

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