I almost hate to keep pointing out your errors, but gold is up less than 20% this year.
Tell me what stocks have done.
Well, my Altria (Philip Morris) is up about 24%. And it paid another 5% in dividends. What was gold's dividend again?
Posted on 12/27/2005 6:20:46 AM PST by hubbubhubbub
Over the past few days, December 21st — when our first Hindenburg Omen (of whatever cluster is coming) — and Thursday December 22nd, the Federal Reserve has conducted one of the largest two-day Repo injections of money into the system since back in September 2001. On Wednesday they added $18.0 billion in reserves and on Thursday they added another $20.0 billion. Is this a coincidence, coming right as we get another Hindenburg Omen? Probably not. Is something high-risk going on behind the scenes here? Let’s review some facts at the Fed. On November 10th, 2005, shortly after appointing Bernanke to replace Greenbackspan, the Fed mysteriously announced with little comment and no palatable justification that they will hide M-3 effective March 2006. M-3 has been the main staple of money supply measurement and transparent disclosure since the Fed was founded back in 1913. It is the key monetary aggregate that includes Fed Repo transactions, that mechanism whereby the Fed increases reserves. The date when M-3 will start being hidden also happens to be the exact month that Iran will declare economic war against the U.S. Dollar by trading its oil in Petro-Euros on its new bourse. But there is more. The Federal Reserve currently has three vacancies within the 19 top Regional Bank and Board of Governor spots. Why? Part of ongoing wholesale resignations.
The latest is from the Philly Fed. Fed President and Open Market Committee member Anthony Santomero has announced his resignation after only a brief year and a half tenure. Very unusual. Hey, Fed Presidents are treated like gods. They have enormous power, prestige, and presence. Why quit? He is far from alone. Over the past few years no less than six Federal Reserve Regional Bank Presidents have resigned. This is highly unusual.
An immediate impact is that we are about to have a largely inexperienced batch of individuals conducting monetary policy in the United States. So of course, the first thing they will do is hide the key money figures. Two positions for the Board of Governors (there are 7)have been open for quite a while. Plus six of the 12 Regional Head spots have turned over during the past few years.
If a substantial amount of oil transactions will suddenly be conducted in Euros instead of Dollars, this should put pressure on the Dollar as folks exchange Dollars for Euros, jeopardizing the Dollar’s status as the world's reserve currency, making it more difficult to print all the dollars the Fed wants to without driving the Dollar into the ground. Iraq threatened to do what Iran has threatened to do just before we went in looking for weapons of mass disappearance. If the Dollar tanks, Treasuries might not be far behind. If Treasuries tank, kiss the Housing-driven boom goodbye. Could the Master Planners be hiding M-3 because they anticipate they may have to monetize the Federal debt, buy our own Treasury Bonds during the coming economic attack against the Dollar? That would require a ton of new fresh money creation — too much to disclose. Could it be some folks at the top of the Fed do not have the stomach to be part of what is about to go down?
M-3 has a direct but lagging impact on financial markets. Look at the chart. Whenever M-3 rises, the Dow Industrials rise. Whenever M-3 is flat or declines, the Dow Industrials decline. The Dow Industrials are a bellwether for the economy. If we can monitor M-3, we can better monitor the future path of equities and the economy. It is wrong for the Fed to stop its disclosure for this very reason. Investors need to know in a free market economy, because M-3 infusion is centrally planned intervention into a free market system. Investors need to know when the Master Planners have decided to intervene. Our buy/sell signals were designed to pick up the scent of Master Planner intervention by analyzing supply and demand forces underlying the markets. So with or without a fully disclosed M-3, we will be able to continue to identify coming multi-week trends.
So what about M-3 the past week? The latest figures show that on a seasonally adjusted basis, M-3 rose 27.3 billion last week, a 14.0 percent annualized clip, and is up $76 billion over the past month, a 9.8 percent growth rate. But those are the massaged numbers. For the raw figures, fasten your seat belt. Are you ready? M-3 was increased $58.7 billion last week (that does not include the huge Repo infusions noted above), a 30.0 percent annualized rate of growth. For the past two week, the Fed added $93.5 billion to the money supply, a 24.0 percent annual clip. Over the past 6 weeks it is up $192.9 billion, a 16.7 percent Banana Republic hyperinflationary pace. This is nuts, folks — unless there is an incredible risk out there we are not being told about. That is a lot of money for the Plunge Protection Team’s arsenal to buy markets — stocks, bonds, currencies, whatever. This level of irresponsible money supply growth makes shorting markets hazardous, yet at the same time says markets are at huge risk of declining. Maybe M-3 growth doesn’t stop the decline this time. Should be a fascinating storm in 2006.
The recent rise in Gold catalogued 74 points over about a month, a 16 percent rally from precisely the day the Fed announced it would hide M-3 from taxpayers and citizens of this great nation. That is no coincidence. Gold sees hyperinflation, monetization of debt, and intervention into free markets. Gold is telling us it expects Ben Bernanke to be an inflationist.
Don’t miss Dr. McHugh’s interview with CBS radio at WWJ 950 AM on December 30th, 2005. You can access this station through the internet by clicking on www.wwj.com . Jayne Bowers presents Dr. McHugh’s views on the Fed’s decision to drop M-3, the Plunge Protection Team, and new Fed Chairman Ben Bernanke.
“For a child will be born to us, a son will be given to us; And the government will rest on His shoulders; And His name will be called Wonderful Counselor, Mighty God, Eternal Father, Prince of Peace.” Isaiah 9:6
CONTACT INFORMATION Robert McHugh, Ph.D. Main Line Investors, Inc. TechnicalIndicatorIndex.com Kimberton, PA USA
Do not forget to add to this that the factor changes as well. 50 years ago a $1 move in any DOW stock equated to a $1 move in the Dow. Over time that factor has changed so that a .25 move in any Dow stock produces a $1 move in the Dow. If the factor never changed the Dow would be between 1,100 and 1,300
Wrong. If you follow the link in post #65 you'd see that housing is only $10.9 trillion, up $3.6 trillion since 2001, of our $51 trillion in net worth, up $10.4 trillion since 2001.
Not to boot that the savings rate is at an all-time low for the people with the highest net worth.
Savings rate statistics are a joke. They don't count capital gains on the plus side, but count capital gains taxes paid as a negative. They also don't count 401k or IRA contributions as savings.
You don't understand the DJIA. Why am I not surprised? They need to change the divisor every time a stock split otherwise the index would drop just because there are twice as many shares at half the price.
The Dow Jones averages are computed by summing the prices of the stocks in the average and then dividing by a constant called the "divisor". The divisor for the Dow Jones Industrial Average (DJIA) is adjusted periodically to reflect splits in the stocks making up the average. The divisor was originally 30 but has been reduced over the years to a value far less than one. The current value of the divisor is about 0.135; the precise value is published in the Wall Street Journal and Barron's (also see the links at the bottom of this article).
It was at $497 just before Christmas, fell back from $530 or so, according to the commodity prices listed in my local daily. Can't speak for today, but that was the case recently.
Yeah right. This IDIOTIC and JUNVENILE nonsense is not worthy to wipe my butt with. Any source that compared our economy to the 'Hindenburg' and refers to Alan Greenspan as 'Greenbackspan' is a joke. These guys have been calling for the collasps of our economy for the past 4 years. When the stock market dropped to 7500 a couple years back, they were comparing it to the 1930's and telling us the DOW is headed below 5000. I laughed and told them it was going near 10,000 by years end, and it did. Financial Nonsense is nothing by a bunch of tin-foil hat junveniles who sell nothing but fear. If you want to follow what these idiots as gospel, you go right ahead. But it is your intelligence which is in question, not mine.
I'm still waiting for you to utter something intelligent.
Grow up you clown.
One heck of a refute. Typical jevenile mentality.
How would you know if I did? Would your keepers tell you? The daynurse perhaps?
I was reading an article in the WSJ about the bond market and the effect that the drop in the 10 year rate to below the two year rate, had on the stock market. I don't know much about economics, but it sounded so contrived that I am sure some Democrat had a hand in spreading the rumor.
Perhaps babysitter. He acts like a 13-year old.
I suspect he's a ward of the state in one capacity or another.
I am at post 22 and you are doing your "GO PAT GO" rendition. I wonder how many posts I have to go before someone starts blaming the Mexicans for devaluing our "way of life".????
Simple answer. We use them to buy nukes and troop carriers, and then the oil providers will accept it again. See how easy that is?
I traded in the spooz pit when you could SCALP one point moves (not many times, but they existed). A ten point move, especially now that the points themselves are way less than they used to be in terms both of percentage (not much you can do about that!) and in terms of dollar value, is not exactly a cry for mommy. And such a BIG move when almost every trader with any money is out of the markets???? Crap.
These are the times when the bank of Malaysia used to come in and throw their weight around in the stock and currency mkts, (before they decided they could back down the entire interbank market with their precious ringitt), because they knew none of the big boys are playing and they could swing it. Ain't nobody home, and moves don't mean anything this time of year, and anyone who knows anything knows that.
I miss the limit down days on the noodles...limit down shut down -65...
Free fall baby...big red sticks...
Ripping through ticks like a runaway freight train...
What a rush...
It was net down about 13 yest, but what was killer is that it was plus 5 or 6 and then just went into free fall...
I have been short for the last two weeks or so just riding out the chop...so it was fun to watch the open position counter spinning up like the national deficit...LOL
Today was as expected ...narrow range chop fed up by cranks and makers...
Still short a boat load...
Tell me what stocks have done.
I am also long TRE at .84, closed above $6.00 yesterday. But, hey! gold is a relic for making jewlery.
Whatever makes you feel good, Toddster!
I almost hate to keep pointing out your errors, but gold is up less than 20% this year.
Tell me what stocks have done.
Well, my Altria (Philip Morris) is up about 24%. And it paid another 5% in dividends. What was gold's dividend again?
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