[extropy-chat] M3 UP UP UP - Something REALLY BAD is going on folks

[Mike Lorrey]

THis is a bogus argument. The M3 is not a measure of the supply of real
Federal Reserve Notes, that is the M1. M3 is M1+M2+other stuff and is
mostly (93%+) NOT FRNs. It is primarily commercial paper: mortgages,
car loans, college loans, municipal and state bonds, etc which back
electronic 'dollars' on the electronic financial system and which, in
and of themselves, are NOT backed by either US Treasury bills, notes,
or US federal gold reserves.

The M1 stands at about $682 billion. The M3 is about $8.6 trillion. M3
is primarily a measure of how much credit the individuals and
businesses in our country (and out of it) have sought to borrow money
from US institutions. Statutes allow the banking system to loan out
something like 20 times the M1 supply.

THis statutory limitation, however, is rooted in 'old economy' thinking
and is the root of our economic troubles the last few years. The M3 is
generally maxed out right now because we are just exiting a recession.
Economic growth needed to expand the tax base (which will allow an
expansion in the M1) and give the profits and income increases needed
to pay off debt, is just starting to occur.

Individuals trying to cry wolf with the money supply for their own
financial reasons always point at the M3 supply and blame the
government, when most of that supply is the result of consumer actions.

=====
Mike Lorrey
Chairman, Free Town Land Development
"Necessity is the plea for every infringement of human freedom.
It is the argument of tyrants; it is the creed of slaves."
                                         -William Pitt (1759-1806) 
Blog: http://www.xanga.com/home.aspx?user=Sadomikeyism


	
		
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