Besides gold, everything in the numbers looks pretty normal. Gold, however, has risen 10% since Christmas. The economic crisis is here. So why is the stock market doing so well? Steven Lagavulin of the Deconsumption blog points out that the U.S. Federal Reserve Board has pumped more money into the system than they have since September 11, 2001:
Fed FloodMichael Nystrom confronts the high stock price question and also concludes that it is due to the massive increase in the M3 money supply:
I've been watching this handy thumbnail graph of Federal open market actions for some time now and thought it might be of interest to pass along. It basically reflects the daily liquidity that's being created--measuring the power of the proverbial printing presses. And frankly, they've been kicked into high gear for the past couple weeks. I assumed this was just to give a quick boost to the stock market going into year's end, but I gotta tell ya.....yesterday's action was massive...I mean the kind of liquidity you wouldn't see unless there was real Fear at the Fed.
To give you some perspective you might eyeball the bottom black lines on this longer-term chart....and note that the last time we saw 60 billion was in the second week of Sept. 2001....
