Stock Market News & Stocks to Watch from StraightStocks » Money Supply

Obama Administration Applying Keynesian Economics to ‘Ensure’ America’s Future Prosperity

FinancialArticleSummariesToday.com — Sat, 13 Mar 2010 22:21:53 +0000

In order to prevent a recession from getting out of hand, the central bank must lift the money supply and aggressively lower interest rates. Once consumers have more money in their pockets, their confidence will increase, and they will start spending again, thereby reestablishing the circular flow of money, so it is held. Words: 542

CBO Budget Projections and the Horrors of Inflation

The Daily Reckoning — Wed, 10 Mar 2010 23:00:15 +0000

The pills that I thought were tranquilizers turned out to be vitamins, and although I am on the verge of some kind of mental breakdown because of the mix-up, I feel great! Turning to the old tried and true, I soon learned that I had started too late, and I was not nearly drunk enough to [...]

CBO Budget Projections and the Horrors of Inflation originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Coming Currency Debasement Good for Gold

FinancialArticleSummariesToday.com — Wed, 10 Mar 2010 04:22:10 +0000

When I look strictly at what’s actually going on in the world, I have to think that gold will go to at least $2,000 in this cycle and there are very credible scenarios in which it could go to a multiple of that number. Why am I so bullish for the yellow metal? Let me tell you why. Words: 469

Using Gold to Fend of the FDIC and Its “Problem Banks”

The Daily Reckoning — Tue, 09 Mar 2010 23:00:27 +0000

People think that Addison Wiggin is just another talented, intelligent, pretty face who secretly thrills to hear people say things like, “You’re a lot better looking than The Mogambo! And younger and smarter, too!” but he is much, much more than that. His story starts off that “The FDIC is even more broke than it was [...]

Using Gold to Fend of the FDIC and Its “Problem Banks” originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Underreported Money Supply may be Disguising Hyperinflation

The Daily Reckoning — Thu, 04 Mar 2010 19:00:36 +0000

Is annualized M1 money supply growing at three times the rate the Federal Reserve is reporting? This is a critical question recently explored by Zero Hedge, which believes the actual growth rate of US dollars “is approaching hyperinflationary levels.” According to Zero Hedge: “For historical reasons unimportant to the point of this analysis, the Federal Reserve in [...]

Underreported Money Supply may be Disguising Hyperinflation originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

Borrow and Spend Economics to Pay for Borrowing and Spending

The Daily Reckoning — Thu, 04 Mar 2010 18:00:57 +0000

Okay, I will admit that we had a little accidental gunfire around here recently, but nobody was hurt, and all that really happened is that I wasted a lot of very expensive ammunition and scared the hell out of a lot of people, including myself, a commotion which instantly activated my Amazing Mogambo Reflexes (AMR), [...]

Borrow and Spend Economics to Pay for Borrowing and Spending originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

$1 Trillion Mortgage Bomb Still Ticking Away

The Daily Reckoning — Wed, 03 Mar 2010 21:00:03 +0000

How close are we to being back to square one with impending mortgage meltdowns? According to SNL Financial, much closer than anyone would like to think. It has gotten a hold of an updated version of the original 2007 Credit Suisse chart that such caused a stir at that time. It’s reprinted below along with [...]

$1 Trillion Mortgage Bomb Still Ticking Away originally appeared in the Daily Reckoning. The Daily Reckoning, offers a uniquely refreshing, perspective on the global economy, investing, gold, stocks and today's markets. Its been called "the most entertaining read of the day."

China’s Tightening Is a Good Thing

The Daily Reckoning — Sat, 13 Feb 2010 19:46:51 +0000

China sees a bubble ahead and is trying to avoid it – is that such a bad thing? Isn’t this what we expect Ben Bernanke and the Federal Reserve to do here at home – take clear and decisive action to drain off excess liquidity in the economy before inflation takes hold? The People’s Bank of China [...]

China’s Tightening Is a Good Thing originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

China: Social Stability Through Economic ProsperityChina: Social Stability Through Economic Prosperity

Frank Holmes — Fri, 12 Feb 2010 06:00:00 +0000

China sees a bubble ahead and is trying to avoid it ndash; is that such a bad thing? Isnrsquo;t this what we expect Ben Bernanke and the Federal Reserve to do here at home ndash; take clear and decisive action to drain off excess liquidity in the economy before inflation takes hold? The Peoplersquo;s Bank of China did just that after it saw that 1.4 trillion yuan ($204 billion) worth of bank loans were issued in January, more than the total loaned in the three previous months combined. For all of 2010, the target loan amount is 7.5 trillion yuan, so itrsquo;s easy to see why the government might want to slow the pace a bit. Forbesrsquo; online headline was ldquo;China Tightens the Screws,rdquo; but letrsquo;s have a little perspective. Barclays Capital predicts that the 0.5 percent increase in bank reserve rates (from 16.5 percent of deposits to 17 percent) will remove 300 billion yuan from the Chinese economy. Thatrsquo;s only 20 percent or so of the amount loaned in January. And itrsquo;s not like cash is going to dry up ndash; the Peoplersquo;s Bank plans to increase the nationrsquo;s M2 money supply by 17 percent this year. Januaryrsquo;s M1 money supply report showed a 39 percent increase (chart above). Not exactly a screw-tightening. Chinarsquo;s CPI rose 1.5 percent in January, which is not extreme, and the chart above from BCA Research shows that real estate prices in terms of per-capita income had not entered a bubble phase as of year-end. But perhaps the more telling number was wholesale prices ndash; up 4.3 percent year over year and more than double the increase seen in December. This signals that higher inflation at the consumer level could be around the corner. Markets are taking a hit based on this news ndash; this shows how important China has become to the world economy. It surpassed Germany as the top exporting country by value at $1.2 trillion, and in January its exports were up 20 percent compared to a year earlier. Even better, its imports were up 85 percent year over year. What we may actually have is a classic bull market in the making ndash; one that climbs the proverbial wall of worry, which suggests that investors buy on corrections. The table below shows the standard deviation (sigma) over 10 years for the main stock markets in mainland China and Hong Kong. The weekly sigma for the Shanghai A-share market is plus or minus 5 percent, while its normal quarterly swings can be nearly 25 percent up or down. Itrsquo;s nearly impossible to pick exact tops and bottoms ndash; adding to core positions after any correction greater than one sigma is a safer and more prudent way to invest. Beijing is tending to its economy so it performs over the long term. This is central to its goal of social stability through economic prosperity, and it seems to be working ndash; millions of households join Chinarsquo;s middle class every year. We all know what can happen when an asset bubble grows huge and then bursts ndash; wersquo;re still recovering from 2007-08. China is a long-term growth story, and how well it manages that growth will have an impact on all of us. A little caution now should be seen as preventative maintenance, and we all know that when wersquo;re talking about cars or economies, thatrsquo;s a good thing. M2 Money Supply is a broad measure of money supply that includes M1 in addition to all time-related desposits, savings deposits, and non-institutional money-market funds. M1 Money Supply includes funds that are readily accessible for spending. Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility. The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of 300 A-share stocks traded in the Shanghai and Shenzhen stock exchanges. The Hang Seng Index is a capitalization-weighted index of 33 companies that represent approximately 70 percent of the total market capitalization of The Stock Exchange of Hong Kong. The Shanghai B-Share Stock Price Index is a capitalization-weighted index that tracks the daily price performance of all shares listed on the Shanghai Stock Exchange available for investment by foreign investors. The index is priced in US dollars. The Shenzhen B-Share Stock Price Index is a capitalization-weighted index that tracks the daily price performance of all shares listed on the Shenzhen Stock Exchange available for investment by foreign investors.

Economic Warnings from an Elderly 3rd Grader

The Daily Reckoning — Wed, 10 Feb 2010 19:00:48 +0000

I was leisurely looking out of the periscope of the Mogambo Bunker Of Paranoid Fear (MBOPF), using it not as an aiming device with which to direct a devastating firepower at enemies both real and/or imagined, but to look in pity at the faces of all the people passing by, and muttering disrespectful things to [...]

Economic Warnings from an Elderly 3rd Grader originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

Fear, Gold and the DollarFear, Gold and the Dollar

Frank Holmes — Mon, 08 Feb 2010 06:00:00 +0000

The U.S. dollar was up last week against the euro out of fear of how debt problems in Greece and elsewhere in Europe will be resolved, and as a result gold had a tough week. The dollarrsquo;s rally appears to be a short-term safe haven move, rather than a response to improving economic conditions in the U.S. In fact, Fridayrsquo;s report of a net loss of 20,000 jobs in December (the expectation was for a net gain in employment) and that many thousands more would-be workers have given up looking for jobs is evidence that the economy remains somewhat weak. This weakness makes it less likely that the Federal Reserve will play it safe by not raising interest rates, and more likely that Congress and the Obama administration will pump more financial stimulus money into the system. Both keeping rates near zero and expanding the monetary base are negative for the dollar, and thus positive for gold. Wersquo;ve seen that after a period of money-supply tightening in December and January, it appears that money is loosening again. The federal deficit is pegged at more than $1 trillion this year and more than $8 trillion through 2019mdash;this will slowly weigh on the dollar. On top of that, the TARP money being repaid by banks is not being removed from the monetary basemdash;we shouldnrsquo;t be surprised if that money is used as a stimulus booster shot ahead of the 2010 midterm elections. Our gold-dollar oscillator (above) shows that the dollar is approaching being overbought over the past 60 trading days, while gold is showing signs of being oversold. The magnitude of the current spread between gold and the dollar typically means that both could be close to a price reversalmdash;the dollar heading back downward and gold back up toward the mean. In the 1990s, a strong dollar was associated with a strong U.S. economy, but the current one-month dollar rally has been accompanied by a drop in the Samp;P 500. With most of the worldrsquo;s economic growth coming in emerging markets, many U.S. companies are relying on overseas sales to drive revenue and profit growth. A stronger dollar hurts U.S. companies trying to thrive in the global marketplace. This is clearly evident in the illustration below. Here you can see that the world has changed and a strong stock market is aided by a weaker dollar. The Samp;P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The U.S. Trade Weighted Dollar Index provides a general indication of the international value of the U.S. dollar.

Is Inflation Directly Tied to the Money Supply?

Justice Litle Editorial Director Taipan Publishing Group — Mon, 01 Feb 2010 14:42:08 +0000

Some argue that increased money supply (freshly printed dollars) automatically translates to inflation. This is not exactly true, and it’s important to understand why. How do you define inflation?...div class="feedflare" a href="http://feeds.taipanpublishinggroup.com/~ff/taipan?a=9obYKEFsUNE:xR4Nm4JGyrY:yIl2AUoC8zA"img src="http://feeds.feedburner.com/~ff/taipan?d=yIl2AUoC8zA" border="0"/img/a a href="http://feeds.taipanpublishinggroup.com/~ff/taipan?a=9obYKEFsUNE:xR4Nm4JGyrY:V_sGLiPBpWU"img src="http://feeds.feedburner.com/~ff/taipan?i=9obYKEFsUNE:xR4Nm4JGyrY:V_sGLiPBpWU" border="0"/img/a a href="http://feeds.taipanpublishinggroup.com/~ff/taipan?a=9obYKEFsUNE:xR4Nm4JGyrY:F7zBnMyn0Lo"img src="http://feeds.feedburner.com/~ff/taipan?i=9obYKEFsUNE:xR4Nm4JGyrY:F7zBnMyn0Lo" border="0"/img/a a href="http://feeds.taipanpublishinggroup.com/~ff/taipan?a=9obYKEFsUNE:xR4Nm4JGyrY:wd9GD17jvC4"img src="http://feeds.feedburner.com/~ff/taipan?d=wd9GD17jvC4" border="0"/img/a a href="http://feeds.taipanpublishinggroup.com/~ff/taipan?a=9obYKEFsUNE:xR4Nm4JGyrY:l6gmwiTKsz0"img src="http://feeds.feedburner.com/~ff/taipan?d=l6gmwiTKsz0" border="0"/img/a /divimg src="http://feeds.feedburner.com/~r/taipan/~4/9obYKEFsUNE" height="1" width="1"/

Inflation 101

The Daily Reckoning — Mon, 18 Jan 2010 20:15:07 +0000

Inflation is a hidden tax, an insidious crime against the public. It is the easiest way for any government to confiscate the savings of the public and for generations, wealth has been transferred in this manner. Remember, money is supposed to be a store of value, however due to reckless central bank-sponsored inflation, it can no [...]

Inflation 101 originally appeared in the Daily Reckoning. The Daily Reckoning, a FREE daily e-letter, offers a "uniquely refreshing" perspective on the global economy, investing, and today's markets.

Mobius on threats to global economy

Prieur du Plessis — Fri, 08 Jan 2010 08:11:39 +0000

"If money supply starts heading down, that would be a bad sign for markets generally," Mark Mobius said in this video clip.

Why China May See Low Inflation in 2010Why China May See Low Inflation in 2010

Frank Holmes — Wed, 30 Dec 2009 06:00:00 +0000

Rapidly rising money supply creates the conditions for inflation, but what if that new money is left sitting on a shelf? Thatrsquo;s whatrsquo;s happening in China, according to Andy Rothman, chief macro strategist at CLSA in Shanghai. Rothmanrsquo;s view is that inflation will not be a problem in China in 2010 even though M2 money supply (essentially cash, checking accounts and savings accounts) is up 30 percent from a year earlier. He cites a couple of key reasons for this contrarian opinion: (1) Industrial output is rising, so more renminbi (RMB) are chasing more goods, and (2) a lot of the new money is going into the bank. Rothman says the velocity of money in China ndash; how many times a RMB changes hands in a year ndash; is at its slowest rate in a decade, while at the same time, household savings and business savings are up 16 percent and 32 percent, respectively. ldquo;In other words,rdquo; Rothman writes, ldquo;there are more RMB in China this year, but each RMB is being used less often.rdquo; The increased production of goods is bringing down prices, he says. Car sales, for example, were up nearly 50 percent through November, but the average price of each car is dropping. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-906

Money Supply on Fire, Spreads to GoldMoney Supply on Fire, Spreads to Gold

Frank Holmes — Tue, 24 Nov 2009 06:00:00 +0000

While in San Francisco to speak at the Hard Assets Investment Conference, I sat down with Dow Jones MarketWatch reporter Laura Mandaro to discuss the topic on a lot of investorsrsquo; minds these days mdash; gold. I highlighted some factors for Laura, including the effect rising money supply can have on gold prices. Money supply is on fire in the E-7 and G-7 mdash; theyrsquo;re just printing awayhellip;Unless money supply shrinks dramatically in the G-20 countries and interest rates rise dramatically in the G-20 countries, I think gold is going to go through its 1980 inflation-adjusted price levels. E-7 is a classification wersquo;ve created for the emerging worldrsquo;s most-populous countries ndash; the well-known BRIC countries (Brazil, Russia, India and China), plus Indonesia, Pakistan and Mexico. We believe that demographics are a key growth driver for developing countries, and that by monitoring the E-7, we gain valuable insights and can be early in spotting important new trends. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. #09-821

Ron Paul: Money, Inflation and Government

Alex Stanczyk — Mon, 02 Jun 2008 19:39:09 +0000

Congressman Ron Paul May 30, 2008 These past few weeks have provided an unfortunate opportunity to discuss inflation. The dollar index has reached new all-time lows. The total money supply, M3, as calculated by private sources, is growing at a disturbing 17% rate. The Fed is pumping dollars into the economy at an alarming rate. Just recently [...]

Its Inflation, Stupid

Alex Stanczyk — Sun, 01 Jun 2008 17:04:00 +0000

Alex’s Notes: One of the biggest problems our nations faces today is that the common American has a very low level of financial literacy. Generations of spin and information control have led us to a current generation of Americans and even “Financial Experts” who do not truly understand how our economy works. Beginning at US college level [...]

The Prelude to Double-Digit Inflation

Martin D. Weiss, Ph.D. — Wed, 14 May 2008 16:00:36 +0000

Nearly all the pieces are now in place for inflation to strike with increasing speed and fury, catching Wall Street by surprise, throwing government policy into turmoil and, at the same time, opening up broad opportunities for investors. I know. I’ve seen this movie once before. And the script will forever be ingrained in my [...]

Bookkeeping: Adding to Fertilizers & Mulling the “Market as a Commodity”

Trader Mark — Tue, 06 May 2008 15:30:00 +0000

Looks like the "fertilizer correction" is over. Adding to all 3 of my names on their bounces off support; actually like the Potash (POT) chart the best here, but they all move together.I love this market. Uncle Ben has apparently created so much mone...