Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19
ADL Predictive Modeling Suggests A Big Move In Silver - 7th June 19
US China Trade War Will Start a Recession, or Worse… - 7th June 19
Land Rover Discovery Sport Brake Pads Expected Life, Worn Pads Dash Warning - 7th June 19
The Post Room Selfies Fun at Meadowhall Sheffield, From Game of Thrones to Desert Island... - 7th June 19
SAMSUNG - South Korean Electronics Giant - Investing in AI Stocks - Video - 7th June 19
Gold Price Rally or New Bull Market? - 7th June 19
Digging into the Rising Gold: Trade Tensions, Recessionary Worries and Dovish Fed - 7th June 19
The Risky Stocks Big Lie That Keeps Many Investors Poor - 7th June 19
Gold and HUI Short-term Strength Is a Strong Call to Action - 7th June 19
Fear Drives Stock Market Expectations - 7th June 19 - Chris_Vermeulen
Next British Prime Minister Tory Leadership Betting Markets - 6th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

The U.S. FED: What! Me Worry?

Economics / Money Supply Oct 21, 2008 - 07:48 PM GMT

By: David_Haas

Economics Best Financial Markets Analysis ArticleFrom time-to-time, I like to swing by the Federal Reserve Bank of St. Louis (FRBSL) website to check on their “aggregate” monetary and financial indicators and measure the pulse of our nation's economic base - which is the overall supply of money and credit in the United States economy.


When you have a financial system that is literally “loaned into existence at interest” , as ours is, monitoring the condition of the foundational credit base is critical to understanding money supply, inflation, recession, expansion, etc. Though there's an abundance of great research and information presented by the FRBSL, some of my favorite charts can be found in the area called FRED.

In addition to introducing readers to FRED data, a second motivation for making this post today is to “respond with pictures” to skeptical comments I received from one reader, a licensed Wall Street representative, who contends that the fears of the global credit crisis are wholly overblown (in his “informed” opinion, to which he is entitled). He seemed to imply that the whole thing would likely blow over like a powerful sneeze in the back of church, despite acknowledging in his letter the many leveraged trillions risking, in some ratio, much of the financial capital positioned around the globe.

He may or may not be right and I, for one, won't pretend to make any guesses about the future. All I ever wished to do in my writing on this topic is to point out some of the verifiable, “officially reported” data I find that I see as being potentially relevant in helping readers become better informed as they seek to evaluate possibilities or probabilities of WHAT THEY SEE HAPPENING in the future. And, while watching the actions of the FED is a valuable tool for some, it's of little use to others.

Either way, one thing will become jarringly obvious to anyone who views the charts below and that is; for whatever reason , the ham-fisted FED appears to be mashing down hard on their panic button. As I see it, if our economy were a car and the FED were driving it, they'd be stomped into passing gear with the gas pedal pressed down hard on the floor and the tachometer swooshing through the red-line deep into the engine-blowing danger zone. Whew! We could all guess what probably happens if you drive your car this way and it's no wonder many of us have sweaty palms just from watching them! (Question: Does anybody know the cost of replacing a country's economic engine or who could make the repair?)

But, I don't want you to take my word for it. Since a picture is worth a thousand words, I'll let the following pictures - taken straight from current material available online at the FRBSL website - tell the rest of the story in this post for me.

Total Borrowings of Depository Institutions from the Federal Reserve - Through 2008-10-15

Is this a credit binge or a moonshot?

Is this a credit binge or a moonshot?

Net Free or Borrowed Reserves of Depository Institutions - Through 2008-09-01

Where did all the reserves go?

Where did all the reserves go?

St. Louis Adjusted Reserves - Through 2008-10-08

There seems to be plenty of access to credit for the banks.  Is this where the taxpayers' bailout money comes in?

Federal Debt Held by Federal Reserve Banks - Through 2008-06-30

Where is this debt all going?

Where is this debt all going?

Federal Government Debt: Total Public Debt - Through 2008-06-30

Up Approximately 64% Since 2001-2002 Timeframe.  Inflationary?  Perhaps, unless it's being sucked into a financial black hole.

Up Approximately 64% Since the 2001-2002 Time-frame. Inflationary? Perhaps, unless it's being sucked into a financial black hole.

Privately Owned Housing Starts: 1-Unit Structures - Through 2008-09-01

Remember, we may STILL NOT BE in a recession.

Remember, we may STILL NOT BE in a recession.

Household Debt Service Payments as a Percent of Disposable Personal Income - Through 2008-04-01

Have consumers finally reached a tipping point in their ability to consume?

Have consumers finally reached a tipping point in their ability to consume?

Nonperforming Total Loans, Banks with Total Assets from $1B to $10B - Through 2008-06-30

Nonperforming Loans At Mid-size Banks

Nonperforming Loans at Mid-size Banks. No recession?

I've just touched on a just a few high spots but, for those who are interested, there's a ton of information left to sift through in the FRED database. With these graphs, I've provided a fairly concise yet comprehensive look at what seems to be happening, thus far, on the monetary front and with the downturn in our consumer-driven economy. Just remember, while most of these graphs are current to within the last few months, none of them reflect the rather dramatic central bank actions taken within the past couple of weeks . Therefore, I expect even more “parabolic” or vertical changes to show up in these same graphs in months to come.

Possibly the main point to be gleaned from looking through the graphs I've presented is that there is little doubt we're witnessing historic actions and, most likely, historic changes. The longer-term graphs show us that there is SIMPLY NO PRECEDENT for the scale of monetary action or reaction that we're seeing today. How such historic acts might manifest themselves in our country's future remains the great mystery of the day. All we know for certain is drastic actions have been taken and nothing happens without consequence in the world of economics. Would it be reasonable to presume that the resultant success or failure may be equally dramatic? Stay tuned, we'll find out shortly.

For those of you who may not think anything you see here is noteworthy, notice that the scale of the Federal Reserve responses shown here is measured only in the billions. Then go and re-read my article “ The Crushing Potential of Financial Derivatives “ . That article was intended to “put things into perspective” and based upon the enthusiastic response from readers, it seemed to do just that. If you haven't read it before, I suggest you be sure to settle into a comfortable chair while doing so.

For more interesting articles and commentary please visit: http://www.haasfinancial.com

    By David Haas
    Consultant

    http://www.haasfinancial.com

    In my consulting practice, I work with individuals, business owners, and professionals.  I assist business owners and professionals in several critical areas ranging from business start-up, marketing, operational challenges, employee retention, and strategic planning to personal asset protection, financial, and retirement income planning.  Often, these areas relate and need to be integrated to work most effectively.  I also assist business owners in developing exit-strategies that enable them to maximize the value of their business interests and preserve their lifestyle in retirement.  For individuals, I primarily focus on tax reduction, financial, and retirement income planning.

    © 2008 David Haas, Consultant

    David Haas Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules