FEDERAL RESERVE CEASES TO PUBLISH M3 REPORT
March 24, 2006 : M3 has ceased to be published by the US Federal Reserve
The world is left without any reliable data on the dollar-value
As announced last February 15 by Leap/E2020 (http://www.europe2020.org/en/section_global/150206.htm ), yesterday March 23, 2006, the US Federal Reserve (see link below) has ceased publishing M3, the most reliable indicator of the amount of USDs circulating in the world.
The Fed has also ceased publishing a number of less important indicators (such as the amount of EuroDollars, large-denomination time deposits, and repurchase agreements) which could have been used to calculate M3 on the basis of other aggregates.
It is important to bear in mind that the Fed continues to calculate M3 and the other indicators. It doesn’t cease to gather these data, but it no longer shares the information with US citizens and the rest of the world. To use a simple image, it is as if, on the eve of a war, the Pentagone suppressed GPS guidance, including for its own allies.
Such measure, which has had no equivalent since 1945, when the dollar imposed itself as the global monetary reference, is a major break in the confidence contract between the US and its Allies.
This is probably the reason why some refused to believe in the possibility to suppress M3 publication, and expressed doubts about LEAP/E2020’s analyses concerning a global systemic crisis.
Indeed, as a result of the Fed’s decision, it is now impossible to estimate major factors such as the amount of money created to repay the increasing US debt, or the resale of US Treasury bonds in order to buy Yens or Euros… all this at the precise time when uncertainty starts prevailing because a growing number of financial players (from oil producing countries as well as from Asian countries) are beginning to express their intention to sell part of their USDs.
In the coming weeks and months, Europe, Asia and oil-producing countries will have to learn how to navigate without instruments for everything that concerns the dollar value and US deficits’ repayment (pure money creation or based on real wealth). As regards US citizens, they too will have to bet on the worth of their own economy and currency.
According to Leap/E2020, the cessation of M3 publication is as important as Nixon’s unilateral decision to suspend the convertibility of the dollar into gold in 1971. In 1971, the dollar became a currency solely based on the rest of the world’s confidence. But this confidence mostly relied on the general feeling that US economy and its currency were managed transparently. With the end of M3 publication, this transparency disappears completely. The US now wants the world to trust their word, even in the field of their currency’s value. In a world where the confidence in the US has never been so low since 1945, the USD is thus turned into the central player of the beginning global systemic crisis.
Confusion as regards the Iranian Oil Bourse… but confirmation that oil-producing countries’ assets are switched into Euros in significant amounts
A great confusion these days surrounds the exact status of the Iranian Oil Bourse, involved as it is in the complex diplomatic games of the Iran-USA crisis. A most contradictory information circulates (see Pravda: http://english.pravda.ru/world/asia/21-03-2006/77628-oil-0 ). It is however certain (and that was the essential aspect of this Bourse) that the USD is ceasing to be the sole oil-trading exchange currency, as illustrated by the Gulf states’ recent decision to increase their reserves in Euros versus those in USD: http://www.middleeastforex.com/index.php?section=147. The Fed’s decision to end publication of M3 will accelerate this trend… if this decision was not intended to hide it as long as possible.
Indeed, the US refusal to let a Gulf state company (Dubaï) buy terminal operations at six major US seaports, has resulted in raising awareness in the Middle-East that the USD was a trap where they were in the end prevented from buying real wealth from the country of the currency they have accumulated.
The world is left without any reliable data on the dollar-value
As announced last February 15 by Leap/E2020 (http://www.europe2020.org/en/section_global/150206.htm ), yesterday March 23, 2006, the US Federal Reserve (see link below) has ceased publishing M3, the most reliable indicator of the amount of USDs circulating in the world.
The Fed has also ceased publishing a number of less important indicators (such as the amount of EuroDollars, large-denomination time deposits, and repurchase agreements) which could have been used to calculate M3 on the basis of other aggregates.
It is important to bear in mind that the Fed continues to calculate M3 and the other indicators. It doesn’t cease to gather these data, but it no longer shares the information with US citizens and the rest of the world. To use a simple image, it is as if, on the eve of a war, the Pentagone suppressed GPS guidance, including for its own allies.
Such measure, which has had no equivalent since 1945, when the dollar imposed itself as the global monetary reference, is a major break in the confidence contract between the US and its Allies.
This is probably the reason why some refused to believe in the possibility to suppress M3 publication, and expressed doubts about LEAP/E2020’s analyses concerning a global systemic crisis.
Indeed, as a result of the Fed’s decision, it is now impossible to estimate major factors such as the amount of money created to repay the increasing US debt, or the resale of US Treasury bonds in order to buy Yens or Euros… all this at the precise time when uncertainty starts prevailing because a growing number of financial players (from oil producing countries as well as from Asian countries) are beginning to express their intention to sell part of their USDs.
In the coming weeks and months, Europe, Asia and oil-producing countries will have to learn how to navigate without instruments for everything that concerns the dollar value and US deficits’ repayment (pure money creation or based on real wealth). As regards US citizens, they too will have to bet on the worth of their own economy and currency.
According to Leap/E2020, the cessation of M3 publication is as important as Nixon’s unilateral decision to suspend the convertibility of the dollar into gold in 1971. In 1971, the dollar became a currency solely based on the rest of the world’s confidence. But this confidence mostly relied on the general feeling that US economy and its currency were managed transparently. With the end of M3 publication, this transparency disappears completely. The US now wants the world to trust their word, even in the field of their currency’s value. In a world where the confidence in the US has never been so low since 1945, the USD is thus turned into the central player of the beginning global systemic crisis.
Confusion as regards the Iranian Oil Bourse… but confirmation that oil-producing countries’ assets are switched into Euros in significant amounts
A great confusion these days surrounds the exact status of the Iranian Oil Bourse, involved as it is in the complex diplomatic games of the Iran-USA crisis. A most contradictory information circulates (see Pravda: http://english.pravda.ru/world/asia/21-03-2006/77628-oil-0 ). It is however certain (and that was the essential aspect of this Bourse) that the USD is ceasing to be the sole oil-trading exchange currency, as illustrated by the Gulf states’ recent decision to increase their reserves in Euros versus those in USD: http://www.middleeastforex.com/index.php?section=147. The Fed’s decision to end publication of M3 will accelerate this trend… if this decision was not intended to hide it as long as possible.
Indeed, the US refusal to let a Gulf state company (Dubaï) buy terminal operations at six major US seaports, has resulted in raising awareness in the Middle-East that the USD was a trap where they were in the end prevented from buying real wealth from the country of the currency they have accumulated.
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