Deflation-minded individuals are no doubt cheering the recent M3 data featured today in a Bloomberg “Chart of the Day” along with other measures of the money supply.
(By the way, does anyone know how to actually get the chart of the day at Bloomberg? I’ve yet to find a link to a chart in any of these pieces, the graphic above coming from this FT Alphaville report where, apparently, they were somehow able to find it.)
As for M3, it’s not all good. The broadest measure of the money supply (abandoned by the Federal Reserve back in 2006 but reconstructed elsewhere, for example by Capital Economics above) is now down 5.4 percent from a year ago and the fear of fewer dollars chasing the same amount of goods has more than a few economists thinking that we’ll be seeing lots of minus signs in front of the inflation numbers for some time to come.
![[Most Recent Quotes from www.kitco.com]](http://kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
![[Most Recent Quotes from www.kitco.com]](http://kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif)
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
I heard something on the radio the other day that got me thinking. Outside of short run problems, would ending fractional reserve banking combined with a return to a gold standard be that bad a thing?
“Cheering” is a strong word. They’re more like saying “I told you so”. This was only inevitable with the debt destruction that was going to happen after the housing bubble. Where else would you create that debt? Gold’s not leveragable for the masses.
Still, there are strong inflationary forces building behind that dam. Perhaps only a matter of years before they’re released.
Farmland might be a decent investment for nutters right about now.
Chuck
>By the way, does anyone know how to actually get the chart of the day at >Bloomberg?
You probably need one of these:
http://en.wikipedia.org/wiki/Bloomberg_Terminal
I spy with my little eye, something starting with D