Monetary Policy

[Kosher]

The Federal Reserve announced that on this coming Thursday, March 23, 2006 they will no longer publish M3 money data.

The Fed classifies US Dollars into three areas...M1, M2, and M3. M3 is the most reliable measure of US dollars floating in the world markets. As we all know, foreign investment in US currency, bonds, and other assets is HUGE!!! Without it, our economy will collapse.

Why the sudden shift before the Fed's meeting on Tuesday?

All oil transactions worldwide take place in US currency. Iran is the first to be "bucking" this long-standing monoply. At the end of March, they are going to enable oil to be bought using Euro dollars. This is HUGE!!! This can and will have massive US implications...like, foreign investors selling off our bonds, our dollar value declining, etc.

No wonder they want to hide this information now. Especially since Bernanke said we can expect 3 more rate increases because he has to fight the inflation he is going to cause by his rapid printing of more US dollars to flood the global markets.

Anyone ready to see oil hit $100 a barrel this year? Its gonna be a wild ride, so hang on folks!!!

By the way, now I understand why Warren Buffet has been betting that the US currency is going to lose value.

For more information, visit the following link...

http://www.europe2020.org/en/section_global/150206.htm

[RedOctober]

I'm the resident economist and Kosher makes an econ section *oops*

Some helpful and in english info that may help you understand "M3". Its basically an indicator of the Money Supply.

http://en.wikipedia.org/wiki/Money_supply

M0: The total of all physical currency , plus accounts at the central bank which can be exchanged for physical currency.

M1: M0 + the amount in demand accounts ("checking" or "current" accounts).

M2: M1 + most savings accounts, money market accounts, and certificate of deposit accounts (CDs) of under $100,000.

M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements.

http://en.wikipedia.org/wiki/Eurodollars

Eurodollars are deposits denominated in United States dollar at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve Consequently, such deposits are subject to much less regulation than similar deposits within the United States, allowing for higher margins.

Historically, such deposits were held mostly by European banks and financial institutions and thus became known as "eurodollars". Such deposits are now available in many countries worldwide, but they continue to be referred to as "eurodollars" regardless of the location.

The term eurodollar is commonly confused in the USA with the joint European currency, the Euro.

[RedOctober]

My comments:

Yeah, I checked it out..the Fed is discontinuing publication of M3 and they did publish that, no warning, no real reason (they did state that it provided no useful info..but thats not the reality), no nothing. M3 is important in the effect it lets everyone know how much of the United States Dollar is in foriegn banks. Why does the Fed need to know this? All statistics published by the IMF and World Bank (plus manyinternational corporations)are listed in USD (United States Dollars). To purchase Oil in the Mid-East, you need US Dollars. Hence you have to swap you currency to US Dollars in order purchase Oil. Hence its no wonder why many foreign nations hold U.S Dollars in reserve in thier banks. Helps the Fed how much it needs to increase or decrease the money supply here at home.

Why does everyone hold and demand the U.S Dollar? How confident are you that the Mexican Peso will retain its value? Even then, swapping with U.S currency in large amounts can seriously alter what you thought or didnt think you could purchase. The "value" of currency does fluctuate.

With Iran bucking the dollar and now saying they will take Euro's, you no longer need to swap your currency for U.S Dollars if you an EU member. Granted this is only one country (vs. the rest of the MidEast)and does not make too much of a big difference, but several European nations no longer need as much U.S Dollar reserves....so...what to do with the excess? Dump it back to the U.S. via purchasing assets, precious metals (explains the sudden rise in gold as of late) or swap back to your own currency. So....what does this do? More dollars in the U.S and hence inflation takes a spike (and the dollar devalues). To counter this, the Fed will have to raise interest rates (to encourage people to save money rather than spend or invest it).

Now with the Fed hiding M3 (which would give a very good indication as to how much of the U.S currecny comes flooding back home...or ends up somewhere else), its sounds like there up to something sneaky. Not the first time really, the Fed does do sneaky things in the middle of the night to keep the economy running, which always creates an uproar.

Another note, the British Pound used to be the currency of the world. After WW2, the U.S currency took that position. Perhaps this is the first indication that the Euro may be be taking that role next.

[Guest]

the US is going to stay in Iraq for the long run, and it has to, otherwise it will have lost the war and also lost all the effort and energy put into Iraq to try and acquire its oil.

To understand the Bush-Chaney project, we need to go back 15 years to the Kuwaiti war. After the defeat of Iraq, it was placed under economic sanctions by the US, and the northern 1/3 and souther 1/3 became "no-fly" zones. The elder Bush hoped that economic deprivation - embargo -of Iraqi residents would break the back of the government, rather than further war. But this did not occur. Instead, countries in Europelike France, that need petroleum, since their countries do not produce it, made arrangements with Iraq to buy their oil in Euros once the embargo was lifted. During the 12 years of embargo, Iraq reverted into a poverty-stricken 3rd world country, and without the ability to manufacture any weapons of mass destruction. The 8 year war with Iran also depleted their economy.

Of course, once the US government heard about the arrangements between France and Iraq, plans were started to use war to take over Iraq, so the US could acquire the oil, and US dollars would be used,instead of Iraq selling oil and getting Euros for it.

Since Chaney once was the CEO of Halliburton, a company involved in the petroleum industry, he was the primary candidate for VP for the proposed war with Iraq, already in the planning. Since Saddam Hussein was a dictator, the US plan was to walk in, depose the dictator, be hailed as heroes, and take over the petroleum industry under the administration of Halliburton, so the US could handle Iraqi oil in US$, instead of Iraq selling it to Europe in Euros. Of course, the propaganda that Bush-Chaney fed people was the weapons of mass destruction, which was a lie.

The catalyst to starting the invasion was the tragic Twin Towers attack of Sept 11, even though no Iraq association could be proven, but the US congress and stupidand naive American publicwent along with the plan (even though bin Laden is still vacationing in the mountains of northern Afganistan or locally).

But the lesson of Viet-Nam meant nothing to these US military brass and government officials; that middle eastern Islamic countries do not want Americans to interfere with their personal national politics. America is doomed to remain in Iraq, even with the consequences of 2,300 American soldiers dead, many Americans executed by Iraqi anti-American forces, over 30,000 - and closer to 100,000 - Iraqi civilians dead, and the destruction of their country, economy and civilization. America is doomed to remain in Iraq, because Bush-Chaney know that they cannot leave, becasue if the US does leave, after the civil war, they know that the Iraqiswill sell their oil in Euros to France; but keeping the US army there, and at whatever cost in lives, and deceiving the Americans telling them that the Iraqis want democracy, Bush-Chaney want Iraqi oil in US$.

The cat got out of the bag when Bush at his bad state of the State of the Union address talked about American dependence on unstable countries for oil supply. Who was he trying to fool, except 297 million Americans, that the real reason he and Halliburtonwent to war against Iraq was for the oil?

This is also the reason why France refused to send troops to Iraq, because they did not want to jeopardize their relationship with Iraq, and possibly lose the arrangements made for Iraqi oil, should the war fail. But as long as France remains out of the war, they have the chance at Iraqi oil in Euros.

This is not a good situation for the US, and will not end anytime soon. and nobody knows what the result will be. War is money, politics and power, and it is a massive deception for the US government to tell us that US soldiers are there fighting to protect our freedoms. The soldiers are there to protect and give their lives for American big business, just as with Viet-Nam. This is as good a reason as any to object to war and military service, apart from the Gospel basis.

[estevino]

Well written MCO!

[Kosher]

Here's something interesting I found the other day...

BEIJING, March 27 (Reuters) - China should use part of its fast-growing foreign exchange reserves to buy gold as it seeks to adjust the asset mix to hedge against risk, a Bank of China official was quoted on Monday as saying.

Analysts say China has been gradually diversifying away from the dollar -- although fears of a collapse in the U.S. currency will prevent any dramatic shift. Chinese officials have denied reports they plan to sell current dollar assets in the reserves.

"China should appropriately reduce the proportion of dollars in its foreign exchange reserves while increasing the proportion of currencies such as the euro," the Financial News quoted Wang Yuanlong, a director at Bank of China's Australian operations, as saying.

"We can use part of the foreign exchange reserves to buy gold, which would help make the reserves more diversified and help guarantee and increase their value," said Wang, former economist at Bank of China, the country's largest foreign exchange bank.

China's foreign exchange reserves swelled 34 percent in 2005 to a record $818.9 billion, but the central bank has not disclosed the composition.

Last month, state media quoted Wang as saying China should ideally hold between $300 billion and $400 billion in foreign exchange reserves.

China has been a big buyer of U.S. government bonds, helping to finance a heavy U.S. current-account deficit and to keep American interest rates low. Investors watch closely for any sign that Beijing might shift the government's investment mix.

Central bank chief Zhou Xiaochuan said earlier this month that China would adjust the mix of its reserves in light of global market conditions. In doing so, China's criteria would be safety, liquidity and profitability, in that order.

China's currency reserves have soared in recent years as the central bank, in order to hold down the yuan, bought most of the dollars generated by a growing trade surplus, inflow of foreign direct investment and speculative capital.

The fast-growing foreign exchange holdings signal persistent upward pressure on the yuan, despite China's landmark 2.1 percent revaluation of the currency in July, analysts say.

[Kosher]

MO,

Just a note to add to yours...

ALL WARS ARE OVER MONEY

Before Iuse a few examples to illustrate my statement above, I first want to define "money."

mon·ey (P)Pronunciation Key(mn)
n. pl. mon·eys or mon·ies

1. A medium that can be exchanged for goods and services and is used as a measure of their values on the market, including among its forms a commodity such as gold, an officially issued coin or note, or a deposit in a checking account or other readily liquifiable account.
2. The official currency, coins, and negotiable paper notes issued by a government.
3. Assets and property considered in terms of monetary value; wealth.
4. 1. Pecuniary profit or loss: He made money on the sale of his properties.
   2. One's salary; pay: It was a terrible job, but the money was good.
5. An amount of cash or credit: raised the money for the new playground.
6. Sums of money, especially of a specified nature. Often used in the plural: state tax moneys; monies set aside for research and development.
7. A wealthy person, family, or group: to come from old money; to marry into money.

Let's start with God vs. Satan. We read in Isaiah 14:12-14, "How art thou fallen from heaven, O Lucifer, son of the Morning Star! How art thou cut down to the ground, which didst weaken the nations! For thou hast said in thine heart, I will ascend into heaven, I will exalt my throne above the stars of God: I will sit also upon the mount of the congregation, in the sides of the north: I will ascend above the heights of the clouds; I will be like the most High."

We see that satan aspired to be "like" God. He valued that position. He went to war over it and lost.

Let's move forward millions of years to Cain & Abel. God valued Abel's offering and Cain wanted that same value so he killed his brother. Moving forward more, we see during Abraham's time the Kings had captured his nephew Lot as part of their move to recapture monies owed to them from local leaders.

The Vikings, Ghengis Khan, Egyptians, Babylonians, Meads, Persians, Greeks, Romans, British, Russians, Germans, Spanish, Portugese, Japanese, and Americans ALL fought over what we term as "money." Bounty, Booty, the Plunder, Treasures are all terms of the same...money.

Allow me to quote the following verse...1 Tim 6:10, "For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs." (direct reference to wars)

Looking back into the Garden of Eden we read Genesis 2:9, "in the middle of the garden were the tree of life and the tree of the knowledge of good and evil." And again in Genesis 8:21, "Never again will I curse the ground because of man, even though every inclination of his heart is evil from childhood." (direct reference to Abel's blood, see Genesis 4:10) Finally, we read in 4 Ezra 2:14, "'Call, O call heaven and earth to witness, for I left out evil and created good, because I live,' says the Lord." And again in 4 Ezra 4:30-31, "For a grain of evil seed was sown in Adam's heart from the beginning, and how much ungodliness it has produced until now, and will produce until the time of threshing comes! Consider now for yourself how much fruit of ungodliness a grain of evil seed has produced."


You may be saying to yourself, "Well what about religious wars?" Take Constantine the Great for example. Through a wicked dream he was told to change his coat of arms to the "cross" and he would be victorious...and he was but for the wrong reasons. The deception of being a "Christian" worked for his materialistic conquests. Later were the Crusades. Religion was simply a "social cause" to get them rallied to attack those who were charging Usery (interest) on loans when only the church's coffers were to do that. Again...money.

Now let me fast forward to more modern times...American Revolution was about "taxation without representation." The secret to any nations success lies in its tax base. How it collects taxes and more importantly how is redistributes it back to its countrymen is critical. Monarchies and dictatorships fail because of the inefficient distribution of tax dollars. As a people, aren't we upset when we hear of our tax monies being spent on nonesense? Of course we do! So the Colonists were giving their money to the King but didn't receive any of it back in the form of roads, schools, business incentives, public works, etc.

The Civil War, another good example of money wars. The social cause to rally folks to fight was slavery but the true cause was the issue of State vs. Federal rights. Were we a Republic (South) or a Federalist system (North)? At its very core, was the issue of paying tribute to Washington DC or keeping it within each State? We all know the outcome. Helloooo I.R.S.

WWI, WWII, Korea, Vietnam, Gulf War, etc. were all over money. The Nazi, the Bolshevics, the radical Islamics, etc. are all about money. Remember Beruit? How the Christians and the Muslims were just "fighting" it out over religion...or were they? Did you know that Lebannon is a MAJOR opium producer? Religion provides a great disguise for "druglords" fighting over turf. Same with Albania. Same with Afghanistan. Same...Same...Same.

So people of greed rally their people to fight over things like money, oil, gold, food, drugs, etc. All of which are things of value!

Kosher