Can Someone Explain This?

Discussion in 'Economy' started by Annie, Jul 21, 2011.

  1. Annie
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    Annie Diamond Member

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    Following Third Largest Weekly Surge In M2, Expect Artificial Spike In Leading Economic Indicators | zero hedge

    Lots of charts, but what does it mean?
     
  2. Baruch Menachem
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    Baruch Menachem '

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    M2 is high power money, and money supply is a indicator of economic growth. The economy in keynsian terms is explained as money in circulation times the velocity of money is equal to all the prices in the economy times all the quantities of goods and services sold in the economy.

    What he is saying is that the money supply has suddenly increased, which means that the computers on wall street wil assume economic production has also increased.

    Alternatively, it could just mean that prices are getting ready to skyrocket. the next set of statistics will show either we are ready for a new boom in inflation or real economic growth. But he is arguing that what is actually happening is that money is just being shuffled without any real increase in the money supply or economic activity. Which means he is predicting more stagflation.
     
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  3. MeBelle
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    MeBelle Mebellien Mothership © Supporting Member

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    Excellent response!
     
  4. Annie
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    Annie Diamond Member

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    So manipulation of reporting is going on? Why? To what ends and by whom?
     
  5. Trajan
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    Trajan conscientia mille testes

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    Annie, seriously? ;)

    Bernbank (bernanake) for one and anyone who has stake in making it appear that there is a 'recovery' or anyone who wants to attmept to goose so they don't have to enact QE 3 (which will put inflation thru the roof in an election year;))
     
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  6. Annie
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    Annie Diamond Member

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    I figured it might be something like that, still would like to hear the analysis from someone in the field.
     
  7. Trajan
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    Trajan conscientia mille testes

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    no problem cupcake ;)

    [ame=http://www.youtube.com/watch?v=dOOTKA0aGI0]‪Dennis The Constitutional Peasant‬‏ - YouTube[/ame]
     
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  8. Spoonman
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    Spoonman Gold Member

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    it means someone is expecting the economy to take a noticable downturn and is looking to artificially prop it up. it's like a botox injection for the economy.
     
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  9. Annie
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    Annie Diamond Member

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    Yeah. Trajan, yourself, and I see it the same way. I wonder though if Toro or other investors/economic major types could find any other explanation or reasons the writer got it wrong?
     
  10. Baruch Menachem
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    Baruch Menachem '

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    I think Toro has been beating this drum for a long time.
     

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