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No longer could central banks determine how much debt was created. They used to do that by limiting the amount of central-bank money they supplied, which formed the base of all loans

Hmmmmm....M1 only grew about 5% over the LAST 4 YEARS!!!

1 posted on 12/18/2007 7:52:51 PM PST by Toddsterpatriot
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To: 1rudeboy; Mase; expat_panama; Rusty0604; Jim 0216; xjcsa; VegasCowboy; Fan of Fiat; Moonman62; ...
Interesting Ping!
2 posted on 12/18/2007 7:54:15 PM PST by Toddsterpatriot (What came first, the bad math or the goldbuggery?)
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To: Toddsterpatriot

“which is simply broad money,”

That’s what I need. Broad money. Enough to get several broads. And cars, for the broads.


3 posted on 12/18/2007 7:56:26 PM PST by UCANSEE2 (Just saying what 'they' won't.)
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To: Toddsterpatriot
Actually, they can readily ensure that tons is created by just creating it themselves directly. What they can't do is directly stop banks from making tons of it, if said banks have a hankering to do so. They can influence this indirectly, though, and very strongly. (If the Fed set short rates at 20%, then...)
4 posted on 12/18/2007 7:58:14 PM PST by JasonC
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To: Toddsterpatriot
And MZM grew 25.5% , or 5.85% per year on average, and by $1.64 trillion overall.
5 posted on 12/18/2007 8:02:42 PM PST by JasonC
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To: Toddsterpatriot
Hmmmmm....M1 only grew about 5% over the LAST 4 YEARS!!!

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M3! M3! M3!

7 posted on 12/18/2007 8:18:44 PM PST by Mase (Save me from the people who would save me from myself!)
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To: Toddsterpatriot

Well, the money came from investors, right? I don’t see the big deal. Also, HSBC and Citi have brought SIV’s worth several billion dollars onto their balance sheets. I wonder how that will affect the credit markets.


8 posted on 12/18/2007 8:21:41 PM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Toddsterpatriot
Here's an interesting chart of the money supply over at wiki. It seems M1 has been declining in influence for over 40 years.

http://en.wikipedia.org/wiki/Image:Components_of_the_United_States_money_supply.svg

9 posted on 12/18/2007 8:42:11 PM PST by Moonman62 (The issue of whether cheap labor makes America great should have been settled by the Civil War.)
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To: Toddsterpatriot
Thanks Todd, this is quite a thesis.

A while back we were looking at the $20 billion China pours into bank US deposits every month thats supporting the US/China current account deficit; it makes sense that while some foreign money goes into T-bills, the bulk would go into high paying (though also high risk) mortgages.

16 posted on 12/19/2007 4:03:37 AM PST by expat_panama
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To: Toddsterpatriot
The Fed can't save its member banks by inflating this debt away it is gargantuan what will that do to the dollar ?

Write the bad debt off now !

17 posted on 12/19/2007 4:30:38 AM PST by Vet_6780
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To: Toddsterpatriot

Oil is the world currency.


27 posted on 12/19/2007 10:50:05 AM PST by RightWhale (Dean Koonz is good, but my favorite authors are Dun and Bradstreet)
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