M3 shows no growth for 16 weeks... I wonder what this means

[althecat]

2004-01-05 8861.0
2004-01-12 8885.8
2004-01-19 8902.6
2004-01-26 8939.4
2004-02-02 8933.7
2004-02-09 8935.6
2004-02-16 8975.5
2004-02-23 8998.8
2004-03-01 9020.9
2004-03-08 9015.1
2004-03-15 9059.9
2004-03-22 9073.6
2004-03-29 9120.7
2004-04-05 9112.7
2004-04-12 9127.9
2004-04-19 9133.3
2004-04-26 9177.9
2004-05-03 9232.6
2004-05-10 9233.3
2004-05-17 9278.5
2004-05-24 9251.0
2004-05-31 9251.6
2004-06-07 9259.1
2004-06-14 9294.9
2004-06-21 9281.0
2004-06-28 9308.3
2004-07-05 9244.0
2004-07-12 9239.4
2004-07-19 9260.5
2004-07-26 9273.0
2004-08-02 9266.9
2004-08-09 9248.9
2004-08-16 9260.2
2004-08-23 9296.9
2004-08-30 9286.1
2004-09-06 9278.2

Source:
http://research.stlouisfed.org/fred2/series/M3/28

Note also that the two recent plateaus in M3 growth have no precedent in the past 10 years

[althecat]

1. The reason I ask is that to be honest I haven't a clue...

... but it is damnedly odd... last time it happened quite a few economic commentators started to note its happening...

[da_chimperor]

2. Well . . .

if the money supply has been growing steadily, and then stops growing even when it should be. Well, to me it seems to say that money is being taken out of the country, and more than usual. So . . . yeah. Capital flight? I think that's what they call it. This is no expect opinion though.

[rogerashton]

3. Interest rate targeting?

The fed "targets" short term interest rates and adjusts money growth to bring the rates closer to the target. So this could be insupport of the interest rate rises. M3 includes "some Eurodollar" accounts, so -- if it is capital flight -- that component would probably be disproportionately affected (and it might turn up more in M3 than other aggregates). I'm sure somebody knows how it breaks down by components, but I dont.

[izzie]

5. Something seems to be going on in the world money field.

Do you think we may be trying to hold our place in the world? Where can you read about this stuff? I need it for some one with very little back ground on it.Someone must write about it and not make it so dull.

[TahitiNut]

4. Off-shoring, imho.

:shrug:


On edit: Also, it must be remembered that when the Fed sells T-bills, the money supply is reduced. So, the rate at which the Fed borrows (domestically) will show up in M3.

[snippy]

6. It looks to me to be due to a decrease in MZM, which in turn looks to be

due to a decrease in money market funds. M1 has continued to grow over the 16 week period and M2 has been flat just like M3. But MZM has decreased apparently offsetting the increase in M1.







The decrease in both retail and institutional money market funds can be found here. http://www.federalreserve.gov/releases/H6/Current/

I don't know the significance of all this, but since MZM is supposed to represent money readily available for for spending and consumption it seems to point to the possibility of slower growth, particularly growth in consumer spending.

[pretzel4gore]

7. stock markets defy common sense

the price of oil goes up, the weather's tearing apart florida and airlines going bust yet dow goes up? is that the plunge protection team or is that just cnn/foxnews tweaking the numbers/graphics?
in georgebushamerica, there aint no truth