Federal Reserve money supply report is about to fall into the abyss

Journal Inquirer.com
By Harlan Levy
12/01/2005

In a little-noticed decision a few weeks ago, the Federal Reserve Board said it would stop publishing its weekly M3 money supply number as of next March, although it will continue to publish M0, M1, and M2. ...

But why should you care?

Actually a lot of you should -- those who own stocks, and that amounts to about half of all U.S. households.

Now back to M3: I asked the Federal Reserve Board why it will stop publishing M3.

"Our searching of the economic literature revealed that very few economists used that aggregate," the Fed responded, adding that "M3 does not appear to convey any additional information about economic activity that is not already embodied in the M2 aggregate. Further, the role of M3 in the policy process has diminished greatly over time. Consequently, the costs of collecting the data and publishing M3 now appear to outweigh the benefits."

Some financial analysts disagree violently.

"They know what's coming -- massive amounts of dollar creation to fund the worsening trade and federal government budget deficits," says James Turk in the Free Market Gold & Money Report.

"There is only one reason for the Fed to conceal important monetary component information," The King Report says. It's "to cover up the truth about what the Fed, central banks, and the really big money are doing."

The Fed, central banks, and other groups are informally known as the "Plunge Protection Team."

The PPT is poised to buy stocks and do it secretly, McHugh says, "to stop the higher-than-normal probability that the market could crash."

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