by John Galt
June 4, 2012 17:30 ET
Tonight, Ambrose Evans-Pritchard switches from the Austrian bugaboo view to the Keynesian “oh crap we are all going to die” point of view in his U.K. Telegraph column:
Global slump alert as world money contracts
What? I thought we were in perpetual expansion? The Bernank, Obama, the Demopublicans, Republicrats, and Eurocommies all assured us sheeple that the events of 2008 were a one off event and the probability of a repeat were as remote as an African native becoming President of the United States.
Er….uh…..
So what does he say different tonight? Maybe this tidbit should give my reader a taste of the nightmare upon us:
The latest data show that the real M1 money supply – cash and overnight deposits – for China, the eurozone, Britain and the US has been contracting since the early Spring. Any further falls risk a full-blown global recession.
Yeah, but, well, M1 doesn’t matter and the US stopped measuring M3. So who cares about M1? My readers should. Precious metals investors should. Sane people buying food and prepper supplies should. How bad is it? More from the article:
The world money data collected by Simon Ward at Henderson Global Investors show that real M1 for the G7 economies and leading E7 emerging powers peaked at 5.1pc in November and has since plunged to 1.6pc in April. The data explain why commodity prices are falling hard, with Brent crude down to a 16-month low of under $97 a barrel.
China’s money data are falling at the fastest pace since records began. The gauge – six-month real M1 – gives advance warning of economic output half a year ahead. “Europe needs to start quantitative easing [QE] immediately and China must ease policy,” said Mr Ward.
So much for the cure by Keynes. Rumor has it the Fed is floating a $451 billion QE 3. Considering the crisis is ten to twenty times that not counting the U.S. government debt debacle and all they are doing as all of us Florida natives did as a young child:
Peeing into the ocean when the tide goes out and saying “Look Mommy, I’m refilling the ocean.”
Good luck with that Ben.
According to Lindsey Williams, virtually all the previous QE money went into funding more derivatives since they make more money for the banks than normal lending (and I believe that’s correct). If this is true, certainly Helicopter Ben knows it and putting more QE money out there will simply increase their (and our) exposure to this HUGE risk. One must ask, why he wants this to happen?