[ExI] M0 singularity... you're soaking in it

[samantha]

Brent Allsop wrote:
> 
> 
> Yes, Gordan, thanks for this very educational info.
> 
> The Adam Hamilton article did seeme very biased towards gold freaks.
> 
> His first MZM Money and CPI chart compared the CPI growth rate with the 
> MZM money supply growth rate.
> 
> Durring the year 2006 it proclaimed that the money supply growth rate 
> was : "stable, matches CPI", but this doesn't take into account that 
> there was also a simple significant growth in the number of people, 
> companies, immigrants during 2006.


Where?  Numbers please.  What do these things have to do with CPI anyway?


>  So if they 'match' like this there 
> is some significant deflationary pressure really going on right?  Such 
> numbers aren't "stable" at all?
> 
> So, Gordan, help me better understand this "M1 Multiplier".  So if it is 
> negative, that means that the fed is injecting 'new' (or printed money) 
> by purchasing bonds and such (M0), but people simply aren't spending 
> this money and keeping it in cache?

What would they spend it on when they see such economic chaos 
descending?  Loan it to people who may have no customers next year or be 
unable to find suppliers still in business or be hit with a rapid price 
spike?   Not likely.  The bankers also know that the jumbo loans and 
even the grade A loans are not safe.  They know that commercial real 
estate is going to crash just as hard.  They are aware that massive car 
and credit card debt defaults are in the wings.   Why wouldn't they rig 
for stormy weather?


> 
> And if so, this is exactly what I was thinking of as I read the Adam 
> Hamilton article.  I  figured the money must occasionally do things like 
> double during a single year to help get us out of panics like this where 
> people hoard cache.  A negative "M1 Multiplier" is evidence that this is 
> happening or that cache is being horded?
> 

No, it does not help at all.  It means ultimately that every dollar you 
hold is worth approximately half of what it was before.  The dollar to 
day is worth 5 cents compared to a 1920 dollar.  What do you think that 
does to long term investment?  What does it do to retirees?


> How would this differ if people were hoarding money in real cache in 
> places like mattresses verses their cache savings accounts?  Would that 
> change this M1 Multiplier?
> 
> Either way, it is very exciting to see this kind of long term geometric 
> growth in the amount of money we all have.  We really are soaking in the 
> singularity.


We are soaking in the death of an empire.  It may well set technological 
singularity back for a decade, perhaps a generation.   And that is if we 
can avoid throwing a jolly war as a cure-all to the downward economic 
spiral.


Cheers.

- samantha