The Invisible M3 and Plumping Up the Economy
The Subsurface World of Inflation, Cannibalism
and the Plight of the Squeezees
by Zbignew Zingh
www.dissidentvoice.org
May 5, 2006
In March 2006,with practically no explanation, the federal government stopped reporting on M3, the broadest measure of the money supply in the U.S. economy. [1]
The most important “asset” in the 21st Century is not cash, gold, real estate, guns or even petroleum, but Information. “Knowledge” trumps everything. That is why, for example, the telecommunications industry is right now in the process of buying up Congress so that it can finish off “network neutrality” and, eventually, strangle your access to knowledge and information on websites like this one. [2]
Thus, when the federal government suddenly withdraws a well-established multi-trillion dollar measure of the economy's health, skeptical minds wonder if, yet again, the Government's penchant for secrecy is intended to keep us ordinary citizen types from seeing what it is up to. What the Administration is likely “up to” is flooding the economy with billions and billions of digitally created “cheap” dollars. The massive influx of money will juice the stock markets, plump up the economy and, of course, create price inflation. [3]
Other than starting a war (or a series of small wars) [4] and the huge government spending on weapons and military infrastructure that war entails, the next-favorite capitalist means of rescuing an economy on life-support is to increase the money supply and stoke inflation. [5] Sometimes, as in the present circumstances, the situation is so desperate that a government may feel the need to start a “perpetual war” and to massively increase the money supply at the same time.
Big Business and the financial sector really could care less about rising prices and the cost of living. That is why when the government reports that “core inflation” is “tame”, it has teased out all the data relevant to individuals who live by wages, that is, such “irrelevant” and “volatile” data as the cost of energy, food and housing. Big business and the financial sector could care less whether the costs of energy, food and housing literally determine how, and whether, the majority of us live or die.
The only inflation factor that Big Business and the financial sector really care about is Wages, that is your wages. If prices rise, but your wages, relative to your cost of living, remain static, then “inflation” only bites you, dude. The bite taken out of your hide translates into someone else's profit-meal ticket. Thus, when prices rise but wages do not, it is as though a portion of workers’ wages is being ripped off. On the other hand, if your wages rise commensurate with the increase in the real cost of living, then the increase in the costs of goods and services goes back into your wages. In that circumstance, money inflation does not give the owner class anything extra to bite into.
Not coincidentally, inflating the money supply (and consequently devaluing the dollar) will also allow the U.S. government to stealthily default on its own debt issues. Because of the dollar's reserve status, we pay for our imports from countries like China, in dollars. The merchants deposit these dollars in their countries' central banks, or exchange them for their local currency. The central banks often turn around and purchase U.S. treasury bills and bonds. By inflating the dollar, the U.S. government will pay back less on both principal and interest. This is also why mortgages benefit the debtor during inflation. Therefore, if, 1) by no longer reporting on M3, the Federal Reserve can increase M3 by more than the previous track record of a hefty 8.22% per year, and 2) the Administration masks the true increase in the cost of living, thus freezing or forcing down wages, then 3) it can engineer an increase in the profitability of corporations, and an apparent growth in the economy . . . all at workers' expense, of course.
Why would the Treasury and the Federal Reserve Bank want to do this? The answer is that the Collective We are in deep economic and environmental doo-doo. Somewhere in the supercomputers at the US Treasury or Federal Reserve, they have run an economic simulation which has analyzed the various humongous hairballs that 21st Century human beings have coughed up: a) Global Warming (or, better characterized as Global Weather Weirding because as the oceans warm and the ice caps melt, various parts of the globe's weather will change in different ways), b) overall natural resource depletion, c) pandemics caused by industrial food production (like bird flu), d) health and environmental problems caused by industrial pollution and foolhardy uses of mercury, pesticides, plastics, fluoride, cell phones, etc., e) radiation exposure due to DU weapons, nuclear armaments, nuclear power generation waste and Chernobyl-like accidents, and f) the peaking of easy light, sweet oil production such that petroleum extraction and refining will become progressively more energy intensive for every bit of energy you can get out of a barrel of oil.
When the Treasury and the Federal Reserve Board (and the Pentagon, too) ran their computer simulations, they came up with the TINA (There Is No Alternative) answer of inflating M3 to keep the global economy chugging. This is the only remedy that Free Enterprise/Open Market “cultists” (like those who populate America's power centers) could accept even though, paradoxically, the world and American economies have been totally
The Subsurface World of Inflation, Cannibalism
and the Plight of the Squeezees
by Zbignew Zingh
www.dissidentvoice.org
May 5, 2006
In March 2006,with practically no explanation, the federal government stopped reporting on M3, the broadest measure of the money supply in the U.S. economy. [1]
The most important “asset” in the 21st Century is not cash, gold, real estate, guns or even petroleum, but Information. “Knowledge” trumps everything. That is why, for example, the telecommunications industry is right now in the process of buying up Congress so that it can finish off “network neutrality” and, eventually, strangle your access to knowledge and information on websites like this one. [2]
Thus, when the federal government suddenly withdraws a well-established multi-trillion dollar measure of the economy's health, skeptical minds wonder if, yet again, the Government's penchant for secrecy is intended to keep us ordinary citizen types from seeing what it is up to. What the Administration is likely “up to” is flooding the economy with billions and billions of digitally created “cheap” dollars. The massive influx of money will juice the stock markets, plump up the economy and, of course, create price inflation. [3]
Other than starting a war (or a series of small wars) [4] and the huge government spending on weapons and military infrastructure that war entails, the next-favorite capitalist means of rescuing an economy on life-support is to increase the money supply and stoke inflation. [5] Sometimes, as in the present circumstances, the situation is so desperate that a government may feel the need to start a “perpetual war” and to massively increase the money supply at the same time.
Big Business and the financial sector really could care less about rising prices and the cost of living. That is why when the government reports that “core inflation” is “tame”, it has teased out all the data relevant to individuals who live by wages, that is, such “irrelevant” and “volatile” data as the cost of energy, food and housing. Big business and the financial sector could care less whether the costs of energy, food and housing literally determine how, and whether, the majority of us live or die.
The only inflation factor that Big Business and the financial sector really care about is Wages, that is your wages. If prices rise, but your wages, relative to your cost of living, remain static, then “inflation” only bites you, dude. The bite taken out of your hide translates into someone else's profit-meal ticket. Thus, when prices rise but wages do not, it is as though a portion of workers’ wages is being ripped off. On the other hand, if your wages rise commensurate with the increase in the real cost of living, then the increase in the costs of goods and services goes back into your wages. In that circumstance, money inflation does not give the owner class anything extra to bite into.
Not coincidentally, inflating the money supply (and consequently devaluing the dollar) will also allow the U.S. government to stealthily default on its own debt issues. Because of the dollar's reserve status, we pay for our imports from countries like China, in dollars. The merchants deposit these dollars in their countries' central banks, or exchange them for their local currency. The central banks often turn around and purchase U.S. treasury bills and bonds. By inflating the dollar, the U.S. government will pay back less on both principal and interest. This is also why mortgages benefit the debtor during inflation. Therefore, if, 1) by no longer reporting on M3, the Federal Reserve can increase M3 by more than the previous track record of a hefty 8.22% per year, and 2) the Administration masks the true increase in the cost of living, thus freezing or forcing down wages, then 3) it can engineer an increase in the profitability of corporations, and an apparent growth in the economy . . . all at workers' expense, of course.
Why would the Treasury and the Federal Reserve Bank want to do this? The answer is that the Collective We are in deep economic and environmental doo-doo. Somewhere in the supercomputers at the US Treasury or Federal Reserve, they have run an economic simulation which has analyzed the various humongous hairballs that 21st Century human beings have coughed up: a) Global Warming (or, better characterized as Global Weather Weirding because as the oceans warm and the ice caps melt, various parts of the globe's weather will change in different ways), b) overall natural resource depletion, c) pandemics caused by industrial food production (like bird flu), d) health and environmental problems caused by industrial pollution and foolhardy uses of mercury, pesticides, plastics, fluoride, cell phones, etc., e) radiation exposure due to DU weapons, nuclear armaments, nuclear power generation waste and Chernobyl-like accidents, and f) the peaking of easy light, sweet oil production such that petroleum extraction and refining will become progressively more energy intensive for every bit of energy you can get out of a barrel of oil.
When the Treasury and the Federal Reserve Board (and the Pentagon, too) ran their computer simulations, they came up with the TINA (There Is No Alternative) answer of inflating M3 to keep the global economy chugging. This is the only remedy that Free Enterprise/Open Market “cultists” (like those who populate America's power centers) could accept even though, paradoxically, the world and American economies have been totally