Thorough article on M3, oil, dollars, and Euros.

[skids]

A through, and long, article one possible explanation as to why the Fed is stopping the report of the M3 statistics. The upshot: they don't want people to see it drop as oil trading with Iran starts, denominated in Euros.

http://www.dailykos.com/story/2005/12/27/115725/53

[billbuckhead]

1. Long and short is that the dollar is backed by oil

That's why America goes through all kind of empire sized street theatre to come up with reasons to control middle east oil and it's shipping lanes

[dweller]

2. Mogambo Guru's view

But we are both on the same page when he asks the timeless question, "Can anyone still believe Keynesian quackery works, or that the key to reviving prosperity is to get consumers to spend yet more borrowed money?"

Well, Congress does, and the Federal Reserve does, and from SafeHaven.com we learn that there may be more than meets the eye to this decision by the Federal Reserve to no longer report M3, the most inclusive estimate of the money supply. They write, "The date when M-3 will start being hidden also happens to be the exact month that Iran will declare economic war against the U.S. Dollar by trading its oil in Petro-Euros on its new bourse." Hmmmm! But before I can take the time to think about this, he says, "But there is more. The Federal Reserve currently has three vacancies within the 19 top Regional Bank and Board of Governor spots. Why? Part of ongoing wholesale resignations. Over the past few years no less than six Federal Reserve Regional Bank Presidents have resigned. This is highly unusual. Two positions for the Board of Governors (there are 7) have been open for quite a while. Plus six of the 12 Regional Head spots have turned over during the past few years."

Notice that he is such a classy guy that not once did he use the phrase "rats deserting a sinking ship." But The Mogambo is not nearly so constrained by civility and breeding, and I say that they, and the whole rest of the Federal Reserve System, are a bunch of filthy, stinking, lying, stupid rats that have made a diseased, pus-filled canker sore of the economy of the United States.

What is even more interesting is when they write, "The recent rise in gold catalogued 74 points over about a month, a 16 percent rally from precisely the day the Fed announced it would hide M-3 from taxpayers and citizens of this great nation. That is no coincidence. Gold sees hyperinflation, monetization of debt, and intervention into free markets. Gold is telling us it expects Ben Bernanke to be an inflationist."

All of this over M3? So how big is the M3 money supply? For this we turn to Doug Noland, who says, "Broad money supply (M3) surged $27.3 billion (week of December 12) to a record $10.148 Trillion. Over the past 30 weeks, M3 has inflated $523 billion, or 9.4% annualized. Year-to-date, M3 has expanded at a 7.3% rate, with M3-less Money Funds expanding at an 8.2% pace."

And we can rely on Doug Noland not only for pertinent data, but to give his unbiased opinion about Ben Bernanke, too, as when he says, "We have a full-fledged monetary quack about to take the helm at the Federal Reserve."

http://worldnewstrust.org/modules/AMS/article.php?storyid=1946

dp

[tofubo]

3. link from the dKos article

http://www.weblog.ro/soj/2005-10-31/Basic+Learning%3A+The+U.S.+Dollar.html#52000

go wake someone up

[skids]

4. You know, I really am enjoying reading that link in full...

...more of a review for me but with a few details I didn't know... like I thought we were off the gold standard much earlier.

But one thing bugs me... he goes through pains to express that the dollar is only worth whatever it's worth based on common public faith that it will retain most of that value, not based on it representing any solid commodity like a refined precious metal. The problem with this argument is that refined precious metals in and of themselves, for the most part, are likewise worthless in fact -- only that people desire them keeps them trading. There are of course applications for precious metals and substances in industry, but they don't come close to making a big impact on the supply, perhaps with the exception of palladium.

Mostly they just sparkle and look pretty. Everything else is centuries of hype.

(On EDIT: maybe in the far future we'll have an "electricity standard" and coins and notes will be batteries. :-)

[Oerdin]

5. That's kind of funny.

Do you honestly think Iran switching from Dollars to Euros effects the number of dollars held by foreigners to any significant degree? If so then you grossly underestimate the number of dollars and dollar equivalents in circulation. If there is an ulterior motive then it would be far more likely that the global reductions in dollars being held by national central banks is the cause. Essentially, most central banks in the world are shorting the dollar. They're betting that it is in for a long slow slide over the next few years due the size of the US federal budget deficit and the nation's massive and quickly growing trade deficit. The world is being flooded by cheap dollars and the central bankers are tired of holding on to trillions of depreciating assets. Instead countries from around the world (countries with far, far, far, far, far more cash holdings then Iran) are reducing the percentage of dollars they hold in reserve and are replacing them with precious metals, bonds, and other hard currencies (Yes, Euros but also Yen, Yuan, and Pounds).

I'm not sure why the M3 report was discontinued (it could very well be that there are so many dollars over seas now days that they can't reliably figure out where they all are or where they are going) but I seriously doubt Iran had anything to do with it.