OK, this is going to start your morning with a short drive off into the economic weeds but it is really, really important because is shows how politics and money work in fine relief. In the latest Federal Reserve H.6 Money Supply figures out Thursday, we see the Fed is orchestrating an increase in the M1 money supply at an 11.3 percent annual rate based on the three month run rate.
Furthere, the M2 rate is also going up. A week or so back it was running a 5.3% annualized rate basis the three month data.
You can see what I call the “gulch” in the Fed’s behavior – the dip in the six-month data:
There are only a couple of possible inferences from this:
The Fed is being loose to goose markets over resistance at the S&P 1,422-1,425 range once past options expiration (today) so going into next week. Or…
They are printing to bail out Europe….or,
They are seeing the financial cliff America is about to drive over and this could be the leading edge of hyper-inflation as a fix-all.
I think it’s way too early for the inflationary goosing, which leaves our main suspect the bailing out of Europe although keep your eyes open, could be another big player is in trouble, in which case in the next two weeks we might see a massive failure.
As far as markets go? Pumping now makes political sense Especially since the Baltic Dry Index has cratered.
What’s Wrong With This Picture
So, says reader Lucky: What’s up with the story “Philadelphia woman faces $600-a-day fine for feeding needy neighborhood kids.“
Answers depending on your view of the Nanny State. Either a) government is ensuring the kids get good nutrition or b) Government hates competition which does an outstanding job. (I pick B.)
Ammo Slammo – Damno!
A couple of readers have been critical of our coverage of government stockpiling of human-killing rounds of ammunition, which one of my friends has now counted up into the 1.2 billion rounds range.
A few outfits are picking this up. CNS News, for example headlines how the “Social Security Administration explains Plan to Buy 174,000 Hollow-Point Bullets“
They do, as the article (and the agency site) point out have 295 agents.
That pencils out to 589 rounds per agent. Hmmm…
Haunted by Hanta?
I’m going to have a word with the cats today since hanta virus has recently killed someone who visited Yosemite.
If you’re ever on a reality show and get to have one medical book, or if you need a BS-detector on pumped-up disease fears, grab a copy of Control of Communicable Diseases Manual ($26, Amazon) since it’s the one book that covers everything medical (in the wild) that can kill you except snipers and governments.
Even my old copy says the natural reservoir of this disease is wild rhodents of the South, Southwest, and warmer parts of the West. Good West Nile info, too.
And, if you’re in Colorado, look up Anthrax, too, while you’re at it.
Russian punkers Pussy Riot is guilty of hooliganism sayeth a Russian court.
The Goon Squad Marker
You read it and make your own call…but one of the hallmarks of Depression is goon squads killing of workers. And guess what just happened?
More after this…