Friday, February 13, 2009

The Disappearance of M3

Based on the number of times I've received the YouTube link for Glenn Beck's recent animated performance on M3 (money supply), I conclude that this "piece of the puzzle" is finally coming to the forefront. Many don't know that during Bush's term in 2006, the Federal Reserve decided that it was too costly to track and report M3 to the U.S. citizens. Here is the official release from the Fed:

Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release. Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks). M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.


Glenn Beck's performance:

As I've said in the past, it is NOT WEEL

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