US money supply plunges at 1930s pace as Obama eyes fresh stimulus

Telegraph UK ^ | May 26, 2010 | Ambrose Evans-Pritchard

[opentalk]

The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history

The M3 figures - which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. The assets of insitutional money market funds fell at a 37pc rate, the sharpest drop ever.

It’s frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the Great Depression. The dominant reason for this is that regulators across the world are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," he said.

...Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200bn to keep growth on track. "We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

[muawiyah]

While M3 contracts at a record rate (hey, it hasn't been contracting at all for many decades) we continue to set new productivity records.

Both items are major factors in deflation.

Soon, you'll be able to buy a new house out of your pocket change.

[VRWC For Truth]

Starving the beast. Galtism is in. Either the bums resign, get voted out, or the crash takes them out. Not healthy to be a Democrat for the next year. Left to rot in jail if they are lucky.

[dforest]

No more stimulis slush funds.

[griswold3]

Capital Strike!

The new ‘Bank of SealyPosturpedic’ is becoming popular.

[Gulf War One]

Why must we have to rely on offshore news sources to tell us what’s really going on in our own country? Did we not once have media that dug down & gave us info?

[Pontiac]

David Rosenberg from Gluskin Sheff said the White House appears to have reversed course just weeks after Mr Obama vowed to rein in a budget deficit of $1.5 trillion (9.4pc of GDP) this year and set up a commission to target cuts. "You truly cannot make this stuff up. The US governnment is freaked out about the prospect of a double-dip," he said..

They shouldn’t be they are doing everything they can to make it happen!

[rarestia]

Jail’s too good for them. They’ll STILL be sucking off our teat with 3 hots and a cot unless Sheriff Joe Arpaio took over the prison systems in this country.