GREAT thread, inspiring this summary:

They'll spend until debt default.
No doubt about it in my mind.
Is there any evidence to the contrary?

When you have a Keynsian hammer, every problem looks like an "opportunity for government financial 'support'" nail.
Their only hammer is spending money, they'll bang away with it until the head snaps off.

Umm, Xbox is not a requirement to sustain life.

Update:
The Slosh is draining, anyhow.

Ben is totally out of policy bullets.

He cannot lower interest rates. They are zero.
He cannot manage Slosh and POMO/REPOS. It will be zero by next week.
His balance sheet is headed to $5Trillion Dollahs.

Why?

This is a Socialist power grab, a social engineering power grab, using the bailout bills as cover. This is why they are sailing through, and this is why they won't bailout the banking system. They are going to keep letting it fail, passing more bad bills with more policy buried within. Each bill will be used to save the system, it will fail, and then another will be added. And another. Within each bill will be goodies like buying cars and crushing them (true) or buying homes and bulldozing them (speculation) and other nightmare socialist policy planks that expand .Gov and screw us over.

Lera,

That's why i'm drinking heavily...again.


Oh, wait, that's every night these days.

i know gen addressed this but what is he trying to accomplish by draining slosh? why can't he accommodate both? i'm learning but multiplier under 1, ben out of bullets: good job guys

Nationalization,Socialization,Globalization, then subjugation.
“We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent.” -February 17, 1950, James Paul Warburg

Quote:

This is a Socialist power grab, a social engineering power grab, using the bailout bills as cover.

It is a socialist power grab, but I think they actually have a PLAN to default.

At some point, overnight, all of our debt will be sucked into a bad bank black hole.

And then they'll default.

And the US won't be the only one to do this.

We'll emerge with much lower incomes for those still working, little credit availability (for individuals and businesses), much higher tax rates and expensive oil. Oh and a hugely diminished military. And lots of dependence on a government that tells us what we can do with the little money we have.

Once you think about it, this is the structure the left (think Kuntsler type of leftist/environmentalist) has always wanted. Why WOULDN'T they default?

We'll have some sort of global regulatory body over banks and trade. Sort of an IMF/World Bank meld that will keep everyone plodding along.

The only challenge will be the mad max episodes in the immediate aftermath of the default.

He is draining because it doesn't matter anymore and he cannot do anything with the paltry amount he has vis a vis the hundred's of billions of bad assets the FOMC has taken on to its H.3 and H.4.1. He is also setting the stage for the next phase of his deflation 'Helicopter' policy speech. That is where he buys the long end and begins to crowd out other credit and asset classes.

This guy is very slow to learn.

Nice Ouroboros icon, Lera.

I'm going to go hide under the bed now.

This thread is turning tinfoil.

Shame.

BILGE

Tinfoil Jason ? HUH ??????????

Well, engineered power grabs, subjugation, and one world government come to mind.

No one mentioned the Amero (yet).

Seriously, though, as others have noted, yesterday's tin is today's news. And frankly this is the single most disturbing thread I think I've seen yet on TF, no tin necessary.

RE: The Amero.

Not saying I believe it, but someone I met recently who is a significant player in the financial industry is *totally convinced* we are going to have some sort of currency change in the next 12-24 months. Meaning, the end of the dollar (and no, it wouldn't be a good thing).

He had never heard of Tickerforum but he could be mistaken for Karl's doppelganger ideologically; just incredible insight into the markets. His thesis was that we were indeed already past the event horizon and that this was one of the likely outcomes.

Whether a new currency results from total desperation by the .gov or by some devious design is where tin comes in. This person was definitely not tin.

Tinfoil is not necessary for the end of the dollar. And if we still have dollars but it takes a million of them to buy a loaf of bread, well, that's just as bad.

And now we have come full circle

*sigh* I was trying to be funny bringing up the Amero.

Please, someone, get this back on track, thanks.

The next figures are released February 5, approximately 5:50 pm CST.

Horror guess is that MULT moves from 915 to 835 or so. This is based upon existing MZM and the soup that Ben is throwing at the economy, simply divided. Add another $163B to the garbage we have on the H.3 for the Monetary Base at 1,697,962M, to 1,860,640M, with M1 of ~1,553,635 and you get ~ 835.

MULT = M1 / Monetary Base

I want to be wrong, really I do...

-------------------------------------------------------------------------------

***The M1 multiplier is the ratio of M1 to the St. Louis Adjusted Monetary Base. For further information on monetary aggregates, please refer to the Definitions, Notes, and Sources at:

http://research.stlouisfed.org/publicati....
http://www.federalreserve.gov/releases/h....
http://research.stlouisfed.org/fred2/dat....

I don't think one world government is tin. Many influential people have been pushing for it in one way or another for a long time. As far as this crisis all being engineered by some super being I think is definitely tin. Laura Tyson is calling for stronger national government, freddie is renting homes to the new peasant serfs, we are all debt slaves in one way or another etc if that doesn't lead to subjugation then i don't know what does.

Lera, I sure as **** hope your wrong.

passive, no offense but this is what jason was talking about. this thread is about the M1 Multiplier and nothing you just talked about is directly applicable. it's all good bro just trying to learn. (and be scared at the same time!)

Please, yes, this thread is so informative and so important, let's keep it strictly focused. I regret trying to be funny above...

From Lee Adler in Wall Street Examiner (referenced in this thread: http://www.tickerforum.org/cgi-ticker/ak....

Quote:

Consequently there’s just no excuse for anyone to be long any kind of financial assets under the circumstances. And there may be every reason to be short, and not just for a short term trade. Another amazing chart is the Demand Deposits component of M1. It’s not something that I usually include in this report, but watching the giant rise in Institutional Money Funds (IMF), which is not included in any of the official Ms but is in MZM, I began to wonder about what is happening with other immediately liquid accounts. Lo and behold, Demand Deposits had been spiking along with the gain in IMFs until the week of December 29. From then until the last data point on January 19, the series collapsed. This is concurrent with the shrinkage of the Fed’s balance sheet, the bond price crash, and the swoon in stock prices over the past month. I assume that this chart will only look worse when the data from the past two weeks is appended.

The abrupt reversal in the chart of demand deposits not a good sign. I have been arguing for a long time that the massive increases in money supply numbers were pure fantasy. Now we may be beginning to see a dose of reality. Looking ahead, if a whole lot of people decide that they want their money they will find that it’s not there, just like Bernie Madoff’s clients did. The reported money supply data is no better than Madoff’s account statements were.

All of these things are deflationary. The question this brings to my mind is that when the Fed actually does start buying Treasuries, is it going to matter if everybody else is selling? This week FCBs sold Treasuries and so did Primary Dealers. If these actors aren’t there to prop that market, if everybody is selling at the same time as the Treasury is flooding the market with paper, then the Fed’s task would seem to be hopeless.

I have found no evidence that this number has ever been below 1.0 before now. If anyone has seen anything, please post.

Lera wrote..

MULT = M1 / Monetary Base

Now we're talkin. Thanks for getting back on track guys, I'd love to figure this out.

I still haven't figured out a satisfactory answer to this, here's what I have found.

Essentially MULT < 1.0 means M0 > M1.

Let's take a look at what is in each of those.

Wikipedia sez (http://en.wikipedia.org/wiki/M1_(economi....

- M0 = currency (notes and coins) in circulation and in bank vaults. M0 is usually called the monetary base--the base from which other forms of money (like checking deposits, listed below) are created
- M1 = currency in circulation + checkable deposits (checking deposits, officially called demand deposits, and other deposits that work like checking deposits) + traveler's checks.

If those definitions are correct, there's no possible way M1 can be less than M0 unless demand deposits are actually negative. Yet, that's what appears to be happening. If those definitions are not correct somebody needs to go fix Wikipedia.

The one thing that others have brought up before but I have been unable to verify is that M0 includes discount window borrowings. I can't find a source for this, but it makes sense. The question then is, does M1 include discount window borrowings as well?

Again I can't find an answer to this, but everything I can find says that M1 ALWAYS includes everything in M0. So until I can find something that disproves that, that's what I'm going with.

Which means that the drop in M1 has to come out of demand deposits.

So unless somebody can verify that M1 doesn't include discount window borrowings, the question we HAVE to figure out is how demand deposits can be negative.

Indeed, demand deposits have taken a STEEP nosedive recently:



Until somebody can convince me otherwise, this is the root cause of MULT < 1.0 IMO. Although I would absolutely LOVE somebody with a decent guess as to why this is happening.

The only thing I can think of is that consumers are spending ALL of their cash.

This is what we have to figure out guys, and until we understand the real cause of this I think it's unwise to go into hysterics about it.

Just sayin'

Jason- Couldn't things become negative when normally it is seemingly impossible because they dont really exist until someone "demands" them? That is, the vortex of bad debt is where the velocity is- it is so powerful that all NON-CURRENCY is being sent into oblivion? I just woke up and am spaced out, and maybe it doesnt make sense. When I first heard of this issue, it made me think of the smell from a electric motor burning out.