The Surge in the Money Supply: Meaningful or Meaningless? Bob McTeer, On Tuesday October 25, 2011, 12:43 pm EDT
"Something dramatic is going on with the official money supply statistics, but its significance is hard to interpret.--------------- the broad measure of money, M2, grew only around 5 percent per year. ----------- A few months ago, M2 growth suddenly accelerated. In the Federal Reserve’s latest H.6 release, as of October 10, M2 growth for the latest 3 months through September had accelerated to 21.1 percent, pulling up the 6 month growth rate to 14.6 percent, and the yearly growth rate up to 10.1 percent. "
In a previous post I mentioned that Ben had followed his normal rhetoric routine regarding easing programs by first announcing that the fed was "ready" to do more if needed and then following that up after the August market pullback by stating that the Fed was "considering" its options. This was after releasing Operation Twist to less than rave reviews.
To me, once we got to "considering", Ben had backed himself into a corner where if the economy started to falter (read the market starts to fall), his hand would be forced. Ben admitted himself that the economy is going to be one of "frustratingly slow growth". In that environment, one has to expect that we are going to see market volatility and corrections.
Once we get a sizable correction, Ben will be forced to deploy QE3. All of this is my long way of saying is that not only is QE3 in play, in my mind it is a done deal.