Friday, June 25, 2010

The Fed needs to start publishing M3 again

The Fed stopped publishing M3 in 2006 because they said it wasn't worth the effort it takes to assemble the data, and that it didn't add significantly more information than M2.

This chart would tend to suggest otherwise.

That chart also suggests that the gold bugs are getting ahead of themselves.  If the M3 growth is really negative (i.e. shrinking), then inflation is not imminent.  Of course, if M3 is really shrinking, then the prospects for meaningful economic growth in the near future are pretty suspect too.

Are we to believe a website called "shadowstats.com"?  The Fed needs to put out some reliable information on this monetary measure for public use.

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