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

Brent Allsop brent.allsop at comcast.net
Sun Jan 25 17:49:52 UTC 2009

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.  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?

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?

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 

Brent Allsop

spike wrote:
>> ...On Behalf Of Gordon Swobe
>> Subject: Re: [ExI] M0 singularity... you're soaking in it
>>> Ben Bernanke's Fed has doubled the monetary base in a single year! 
>>> Holy cow.
>> Normally the Fed responds to tough economic times by reducing 
>> short term interest rates. But short term rates have reached ...
>> -gts
> Thanks Gordon, your post is an excellent and calm explanation, the best I
> have seen in a frenzy of panicky news articles.  I have been a deer in the
> headlights the past few months, wondering where to move my savings.  
> While we debate about inflation/deflation, do take a trip down to the local
> hardware store.  The loss leader tools are selling for about a quarter of
> what they were two years ago.  I suspect a number of Chinese factories are
> dumping in a wild panic to liquidate stock.  For instance, last month I
> bought a drill, 11 bucks, a grinder, 12 bucks, a jigsaw, 11 bucks, yesterday
> a set of wood clamps, 14 bucks for a set of 15.  A year ago those were more
> like 5 to 7 bucks for each clamp, with the set about 100.  They are
> surprisingly solid tools.
> The Chinese could scarcely ship those tools over the sea for the price they
> are getting.  Explanations welcome.
> spike
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