I predict that the government will take the baton for velocity. Everywhere.

Well at least its slower then the BOE linear progression ! :)

What's M0 now?

12/31/2008 $1,686,386M
http://www.federalreserve.gov/releases/h....

Aug 2008 $841,709M

Lowbeyond, did someone calculate the BOE linear progression? Would be very interesting.

Leraconteur did it on page one of this thread

Oh no, I did the Federal Reserve. I know next to nothing about the BOE figures.

when or where can we get an update on this?
I thought it was supposed to be out today?

"Oh no, I did the Federal Reserve. I know next to nothing about the BOE figures. "

Yep my bad. I did not read Entersandman's question clearly enough .

I'm bringing this up again. By end of today or tomorrow morning we should have another print. If the credit markets and FX (and now our beloved spoos) have known this, it should be lower than what we expect it to be.

http://research.stlouisfed.org/fred2/ser.... <-- just for those who load the last page

I don't necessarily want to see a monetary collapse so the idea here is print alot of M0 and then hope M1 ramps up?

They've doubled the monetary base in a few months (uncharted waters here to my knowledge)... I would expect somewhat of a pop on this (like what's seen in 2000). Otherwise, what a ****ing waste and they've accelerated our collapse.

Lemonaid,

That's the only hope; that we are lagging and the trillions will work their way into the system. But the figures don't support that. Vm declines very timely wrt known events from 9/01/2008 to present. Not much lag at all. Just look at my post above, get the dates of Lehman, BSC, B&H strong-arming Congress, The Bailout and the Slosh and it's clear when Ben lost control of velocity and it began a nosedive almost immediately. Money supply is a delicate balancing act and when the system becomes unbalanced it falls apart rather rapidly. Not a surprise, really - all complex systems in business need constant TLC or they fall apart in short order.

This all turned south when we began to buyout the bad assets with Treasury and FOMC money. Up until that point, the banks looked like ****, but the money supply was workable.

Now the banks look workable, and the money supply looks like ****. You cannot squeeze one end of the balloon without the other end bulging out.

All we can do is hope the next print reverses the trend, moves above 1.000. Whilst that is bad, it isn't a monetary collapse.

Next update is January 22, 4:15 CST.

Thanks Lera. I was under the impression it was printed every 2 weeks.

What are you talking about? If Joe Sixpack gets a stimulus check he doesn't know about treasuries. He wants to get laid, drink beer and watch the game. I'm convinced the stimulus should go to people and trickle up. The only problem with this is, without increasing our actual productivity, stimulus only results in inflation causing prices to rise.

the reason the mult has stayed below zero is that dGDP/dDebt is going to zero.

most of the past year's "fiscal stimulus" has been in the form of loans. additional debt is merely accelerating the collapse because of the compound interest component.

with the 1Q09 federal deficit printing at $465B, this implies a full-year deficit of over $1800B, assuming that there are at least 2 Qs worth of additional $350B. The remainder of the TARP goes into Q2 and the Obama stimulus should be at least $700B divided over the remaining 2. This omits a serious decline in tax receipts that should be expected and any other losses on GSE bailouts, AIG, Citi, etc. And it omits the wars. Wiki reports that the US added $1T to the national debt in FY08, suggesting a real deficit twice that of the published one.

The real 09 federal deficit, you can pencil this based upon even what we've seen so far, will be well north of $2T. Maybe even $3T. CBO is projecting 1.2 without the stimulus.

Medicare is in cash deficit since 2007, with the SS surplus projected to go cash negative by 2017. As job losses accelerate, SS surplus inflows will dwindle as the recession deepens, exacerbating the deficit picture. CBO estimates tax receipts declines of $170B thru 2009, which is probably very optimistic.

there should be no stimulus. Spending on consumables or merchandise is NOT, repeat NOT an economy. It's just been so long that the US has been allowed to get away with consuming without producing that the "economists" out there recommending this insanity actually believe that our consumption has value to producers in and of itself and that it is possible for us to have a robust economy without actually producing anything. it has worked for 30 years, ergo it must be a permanent condition in their minds

I get the updates emailed to me when the M1 Multi changes. I get todays email saying the new number is out, but when I go to the site it still has the 12/31/08 .945 number....so I click on the link for the excel spreadsheet version to see if it has the update, not there either, but I did notice that the next updated number will fall on line 666 of the spreadsheet. Those guys at the FED got some sense of humor.
http://research.stlouisfed.org/fred2/ser....

1lump

Boz, some will spend, many more will hoard, and we will see one quarter of a blip and then resume the plunge into Hell.

Why would this work now when 8T has resulted in a collapse of Vm?
Clearly as we throw more money at the problem, it just gets worse.

Bozonian

That is funny, but it is true. Beer, broads, and ball keeps Joe contented. Even docile. His daughters and sons stay contented with Idol and Facebook. Mrs. Joe has her Lifetime and Oxygen.

It's all too easy. Meanwhile, it seems to me that the gist of this thread is that currency actually is just little pieces of paper and they are not worth the number printed on them.

lera, your analysis is amazing but why can't the multiplier go back up? what path could Obama take to reverse course? is it the bulletpoints in gen's ticker? it almost seems irreversible and what happens as we approach zero? why wouldn't greenspan, bernanke do something years ago as the downtrend has been evident since 1984?

iceland is bad but it's not photoguy bad so why should we expect doomsday?

1lumpsum... how do you get the updates emailed to you?

Brucelee - The multiplier can go back up once deflation stops destroying debt. It has to run its course, there are no short cuts. Throwing more money on the fire only makes it bigger by giving deflation more fuel (debt).

Jason from this link http://research.stlouisfed.org/useraccou.... register first then click sign up for updates.
you must register first, if the sign up for updates link does not pop up, register at that link then click on Notify me of updates here http://research.stlouisfed.org/fred2/ser....

"why can't the multiplier go back up? what path could Obama take to reverse course?"

It can. But we need to experience intense pain. We are giving trillions to the banks to hide their losses. They take it all, and sit on it. I am doing the same. My money is in cash, I have it in hand, and I am not spending. Gen's suggestions are all we need and known here and far:

1) Take the 875B, use it to capitalise 16 new banks, .Gov owns them, they have clean balance sheets, lend into the market.
2) Everyone has to get honest with their balance sheet and Tier 123 Level 123 assets so everyone knows what is what
3) 12:1 ratio on leverage, no more, no excuses
4) Throw thousands of bad actors into prison. Bush, Paulson, Bernanke on down to the local grifter who became a RE Broker.

Many banks will implode. The SPX will crater, joblessness will moonshot.

BUT...we will have functioning credit markets and a functioning monetary system.
As it stands right now, we are NOT going to have a functioning credit market and monetary system, and we are going down in a big, spectacular fashion. Let us see what next week's M0 and MULT reveal.

what is your best guess as to where the markets end up? do you agree with gen's take on what the ultimate consequences are in his latest ticker?