Thursday, November 17, 2005

M-3: More Details

What is the Fed hiding? This comes courtesy of

[Safehaven is a market analysis and investment website. Not having used their services, this reporter cannot comment on their performance (which is the subject of this article’s second half, available at But this excerpt, like most of their analyses, usefully describes the activities of the Plunge Protection Team. Like Catherine Austin Fitts, Chris Sanders, and James Turk, these people help explain that the financial markets are rigged, and the M-3 money supply is a key tool in that practice. A good explanation of M-3 appears at --JAH]

The Fed Announces it Will Hide M-3 To Keep You From Knowing What?

by Robert McHugh
November 14, 2005

The Federal Reserve announced on November 10th, without explanation, and I quote, "On March 23, 2006, the Board of Governors of the Federal Reserve System will cease the publication of the M-3 monetary aggregate. It will also cease publishing the following components: large-denomination time deposits, RPs, and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item on this release."

Why? It's simple, really. So that the Plunge Protection Team can hide its market manipulative, equity buying activities. You see, one of the key differences between M-2 (which it appears they will report) and M-3, is repurchase agreements. This is perhaps the most obvious reporting item where PPT market buying transactions show up. If they no longer report this item, folks like us who monitor the growth of M-3 for clues as to when the PPT is likely to buy the market, will have a harder time reporting that fact before, or even as, the PPT buys. Investors will be left more in the dark as to any secret rigging of the stock market. Why now? Apparently the Federal Reserve (a key member of the Working Group, a.k.a. Plunge Protection Team) sees a coming need to buy - or facilitate the buying - of markets, including the equity market, incognito. Apparently, they don't want investors knowing they are the ones doing the buying, keeping prices up, or pushing them higher.

We have continuously demonstrated the high correlation between growth in M-3 and a rising stock market. We have also demonstrated that when M-3 either declines or stays the same, the stock market is prone to decline. The Fed knows its hypocritical hyperinflationary expansion of the money supply recently has been publicized by Fed watchers, and that 12 percent annualized growth in M-3 during a time when the Fed is raising short-term interest rates aggressively, and jawboning a determination to stop inflation, is nothing short of illogical, bizarre Fed behavior. The reason for the dichotomy is quite simple. The Fed can electronically print money and hand it over to the PPT to buy this stock market. That has to be why all the extra M-3 growth over the past several months.

When we presented the Hindenburg Omen analysis several weeks ago, we warned that the PPT would likely buy this market to stop the higher-than-normal probability that the market could crash. Why did we warn that the PPT would likely buy this market, and stop any potential crash? Because of the M-3 numbers. We could see there was too much money being created. We know that the way money gets into the economy is by the Fed buying securities. Inflation is too much money (M-3) chasing goods. Well, GDP (goods and services) is growing annually around 3.8 percent, yet M-3 was being pumped at three times that rate of growth. The difference had to go somewhere. It did. Into markets, and very probably equity markets.

Why all the M-3? Undoubtedly because the PPT wanted to manipulate markets at this time for reasons that are secret to everyone but them. We are left to speculate as to those reasons. Is the economy closer to the brink than anyone realizes? Or, is it politically expedient to goose markets? Do the corporatist elitists want the big payback for backing the powers that be, and insist upon a rising market into year end? Does Greenspan have an all-encompassing, overriding desire to ensure his legacy by seeing the Dow Industrials at an all-time high when he retires in January? We aren't privy to the reasons because the Master Planners do not believe in the forthright flow of information. They believe that bad news cannot be handled by the flock, that confidence must be boosted at all costs, even if it entails manipulating the markets. Don't let the dead be honored, instead sneaking them into Dover at night. Don't let the real jobless figures be released, goose them with a phony birth/death adjustment, and so on. Now we can kiss goodbye the most important Fed statistic computed. Do you see what is happening folks? The Unpatriotic Act steals your civil liberties. Three young girls from Kansas cannot board an Amtrak train to New York unless they have a government issued photo ID. Not some futuristic sci-fi plot. Now. It is called Corporatist Fascism. Next could be freedom of speech. Then martial law. A computer chip under your skin. Eventually, your right to vote. Then it is all over, game set and match.

Not a peep from Congress on the massacre of M-3. Oh the figure will be calculated. We just won't be allowed to know it anymore. Really begs the question, once again, Why? Obviously because the Master Planners expect to have to increase the Money Supply very rapidly, to extraordinary levels next year. Obviously because they believe they are going to need to buy equity and bond markets aggressively next year. Do they see a catastrophe coming that will require hyperinflation to bail the U.S. out? Maybe. Every time we've had a tragic event of mass proportions in 2005, the equity markets have mysteriously risen out of the blue, sharply, taking shorts to the cleaners. London bombing, Katrina, Rita, indictment of a top administration official, etc... Yes, the Master Planners have learned that they have the wherewithal and the gall to buy the markets - and get away with it. They have learned that at those times when markets are at greatest risk, when shorts have their positions lined up, a little S&P futures index buying, a select few large cap stock buys, a leak to the trading floor that their golden boy trader is buying is enough to send the shorts scurrying for cover and buy the market. You see, the PPT only needs to kick start the buying. Then the shorts buy. Then the Hedge Funds jump on the bandwagon in search of that elusive trend - either up or down - deciding it is going to be up, and keep the rally going. But by the time the Hedgies are buying, the PPT is able to get out (and their Wall Street friends who took the risk and bought with them early) at a nice profit, the shorts are out licking their losses, and we watch a waning rally with low upside volume, low advance/decline ratios, and a high number of New Lows - kinda like right now.

Yes, don't let the technical analysts and Fed watchers know when the PPT is coming in. That will spook the shorts out and the PPT needs the shorts in. But the March 2006 M-3 announcement makes one wonder. What in the world are they going to be up to next year, that will require hiding the growth of money supply from the U.S. citizenry who used to own this country, who elected this outfit? War? A big-time war? Martial law? Could it be as simple and corporatist as merely wanting to drive equity markets higher so weak political ratings improve? Maybe nothing to do with national security at all? These are the types of questions every thinking man and woman needs to ask themselves and their congressional representatives, given the Fed announcement. Remember, the original mandate of the Fed was to ensure a stable currency. Money. So now they aren't going to release their measure of money to the public? One thing that can be agreed upon, based upon our technical analysis work, is that we are sitting upon an incredibly fragile moment in the markets, one that is in no shape to psychologically withstand a catastrophic event on its own. It would thus appear that the Federal Reserve, in tandem with the Master Planner Team, is taking steps to prepare for the worst, and unfortunately that requires secrecy from the people. Secrecy about how much money is going into the economy. Secrecy.

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