Chart of the Week: Money Supply

Money Supply has been one of the components of the massive stimulus this market has enjoyed. We see that since peaking in the 3rd Q 2003, it has slid precipitously. The year over year changes have ranged from a high of +18% (Summer 2003) to the recent low (January 2004) near -7%.

Money Supply (to 1/19/04) Source: Hays Advisory MZM.bmp
Source: Hays Advisory

Money supply is one fuel for the market, and regulating it – to control the markets – is especially tricky. If the Fed is actually trying to either deflate a market bubble or avoid consumer price inflation, than they have quite a challenging task ahead of them.

Random Items:
Why the Bull May Be Tiring
Times Are Good When 4 Percent Growth Disappoints
Europe’s tug of war over software patents
The easy money is all gone
Investment Banks Outsourcing to India
Growth Forecasts, Without the Wait

Quoteof the Day
“”I think it to our interest to punish the first insult; because an insult unpunished is the parent of many others.” –Thomas Jefferson
(to John Jay, 1785. ME 5:95, Papers 8:427)