M3 Money Supply Chart

M3 Money supply represents the amount of money added to the money supply. The Federal Reserve stopped reporting this (gee I wonder why) but it is still tracked by private firms.

I have watched this closely over the last few months, as I wanted to see if we were going to see a contraction, or expansion of the money supply.

As you can see, money supply has expanded substantially, going from roughly 13.5 Trillion $USD in August to approximately $14.5 Trillion in November. Annual rate of change (increase) is approximately 17%.

Any expansion of the money supply is bullish for gold.

Baltic Dry Index Chart

The Baltic Dry Index shows us how much surface tonnage is being shipped, which also gives us a feel for how much international trade is being conducted.

As you can see, it has basically fallen off

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The recession is underway. The US economy shrank by 0.3% y-o-y in the third quarter. Adam Lass says politicians need to accept the truth and allow the economy to correct itself. Only then will stock markets genuinely recover. When they do, some investors will make a fortune. But to survive until then, Adam says it is essential to buy put options on weak companies.

More from Taipan Daily:

Pay no attention to the Fed announcement: Durable Goods is where the real news is hiding!

I have a confession to make: As I sit to write to you today, I don’t know what the Fed will do regarding rates. And, quite frankly, I don’t really care.

The reason I don’t know is because the deadline to send this missive in to all the fine folks who convert my barely legible

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While all eyes were focused today on the Fed’s rate cut, the big news was the Fed’s latest cockamamie effort to save world. Indeed, just when you thought the insanity couldn’t get crazier, the Fed announced it’s now going to funnel a massive $120 billion of U.S. funds into Brazil, South Korea, Singapore, and Mexico. And that’s on top of the IMF bailouts already committed to the Ukraine ($16.5 billion), Iceland ($2.1 billion), and Hungary ($25.5 billion)! In response, some folks are cheering with glee, blindly believing that Mr. Bernanke can play Santa Claus, the Pied Piper and the Fairy Godmother all in one act. But anyone with any experience with the real world is quickly coming to the realization that Mr. Bernanke is Desperate — resorting to the most ...

Key News• Iceland's central bank unexpectedly raised the benchmark interest rate to 18 percent, the highest in at least seven years, after the island reached an aid agreement with the International Monetary Fund. (Bloomberg)• Interbank cost of borrowing funds fell across the board on Tuesday, according to the latest daily fixing from the British Bankers' Association, as the recent turmoil on financial markets eased. (Reuters)• Key Reports Due (WSJ):7:45a.m. ICSC/Goldman Sachs Chain Index For Oct 25: Previous: -1.6%. 8:55a.m. Redbook Retail Sales Index For Oct 25: Previous: -1.1%. 9:00a.m. Aug S&P/Case Shiller Home Price Index: Previous: -17.9%. 10:00a.m. Oct Conference Board Consumer Confidence: Expected: 52. Previous: 59.8. 10:00a.m. Oct Richmond Fed Mfg Survey: Previous: -18. 5:00p.m. ABC/Wash Post Consumer Conf For Oct 26 Previous: 50. Two-day FOMC meeting begins.

Quotable "A good conspiracy is unprovable. I mean, if you can prove it,

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Clusterfuck Nation author James Howard Kunstler says "a cascading collapse of international finance is underway." And it makes makes the 1929 crash and the events of the 1930s "look like an orderly small town auction of somebody's grandmother's effects."

Yesterday, while all eyes were focused on the testimony of Secretary Paulson and Chairman Bernanke, there was another hearing going on in the House Budget committee.  In it, the head of the Congressional Budget Office (CBO, non-partisan), Peter R. Orszag, provided some very insightful thoughts on the matter.  The full testimony is available at http://cbo.gov/ftpdocs/97xx/doc9767/MktTurmoil.htm.  However, here is part of it with my interpretation/translation:

"Over the past several weeks, the collapse of confidence in financial markets has become particularly severe. Short-term loans between financial institutions have fallen off sharply. Instead, the Treasury and the Federal Reserve have become the financial intermediaries for them. In other words, rather than financial institutions with excess money lending to institutions needing short-term funding, many institutions with excess short-term money have purchased Treasury securities, the Treasury has placed the proceeds on deposit at the Federal Reserve, and the Federal Reserve has then lent the money

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America's $47-trillion bubble of debt has burst. America's $180-trillion balloon of derivatives has popped. And all the president's men cannot put them back together again. Last year, they tried three different mortgage work-out plans. This year, they tried a massive economic stimulus package. They resorted to a myriad of unprecedented lending facilities. They even bailed out Bear Stearns, Fannie Mae, Freddie Mac and AIG. Each attempt was more radical than the previous. And each attempt failed miserably. Now, appearing before the American people at the White House Rose Garden, they've declared that they're going to try again,  this time with an even bigger, more ambitious plan: A structure to buy up the bad debts of sinking banks ... a guarantee for money market funds ... a prohibition on certain short selling ...

In the wake of Lehman's demise, Fed Chairman Bernanke and Treasury Secretary Paulson will try to put out the word that it's no great trauma. But it's a bluff and they know it. If they openly admitted that the Lehman collapse will paralyze Wall Street, torpedo the stock market and sink economy, they'd have to pony up $100 billion or more to support it. Instead, their agenda has been to push big banks to put up the money. Either way, there's no denying that the Lehman debacle is a massive and immediate threat to U.S. and global markets. At the latest reckoning, Lehman had $691 billion in assets. That makes it bigger than Wachovia, twice as big as Washington Mutual, and over sixteen times larger than Schwab. Lehman's debts — at $668.6 ...

Gold has firmed in the wake of Tuesday's Fed decision to hold steady on interest rates. An uptick in oil prices, along with a slightly easier dollar are helping to support the yellow metal.As expected, the Fed opted yesterday to leave the target for Fed funds unchanged at 2.0%. Subsequently, changes to the policy statement have received extensive scrutiny in an effort to determine when and if the Fed will raise interest rates in an effort to get inflation in check. The recent pullback in energy prices probably provided the Fed with a little breathing room, yet they still ratcheted their inflationary concerns higher in the statement: "Inflation has been high, spurred by the earlier increases in the prices of energy and some other commodities, and some indicators of inflation expectations have been elevated. The Committee expects inflation ...

MARKET COMMENT

July 15, 2008

Senator Jim Bunning threw a strike right down the plate with his excoriation of Bernanke & Co and the Fed today. Bernanke offered no response. But Hall of Famer Bunning still knows how to pitch that’s for sure. [Some say he isn’t right mentally but he was throwing strikes today and sounded the sanest of the bunch.]

The rest of the pols just mumbled the same garbage while a couple of spotlight seekers [you know who they are] wanted to discuss short-selling and speculation. I guess they only want to discuss the latter when things aren’t going their way.

But, Bunning has things right.

“I’m deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan’s easy money in the late 90s and then following the tech …