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 
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.
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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)
