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Hub Economist, Help!

  1. tammybarnette profile image61
    tammybarnetteposted 5 years ago

    I have been reading that M3 will no longer be recognized, recorded, or used....What will be the ramifications of this decision by the Fed?

    1. profile image0
      jomineposted 5 years agoin reply to this


    2. profile image86
      HSchneiderposted 5 years agoin reply to this

      This means the Fed will be looking at economic conditions much more closely than money supply. Money supply was watched more closely for 3 decades due to the fear of inflation. Economic activity is so slow around the world that they are shifting to stimulating economic activity for now rather than worrying about inflation. The Fed Chief, Ben Bernanke, was both a student and Professor who studied the Great Depression. He knows that the recovery in the mid-1930's was cut short by the unreasonable concentration on inflation at the expense of the recovery. The result was a renewed Depression. I totally agree with his renewed emphasis.

  2. tammybarnette profile image61
    tammybarnetteposted 5 years ago
  3. tammybarnette profile image61
    tammybarnetteposted 5 years ago

    HSchneider, I can understand trying not to panic an economy over inflation....However, to me this looks more like hiding the wealth gap. Also, in the links I provided, the author stated that although M2 and M3 run close, at the exact timing of large economic bubble formations M3 grew 2 to 3 times faster (not quoting, but somewhere in that area, you can read it if you like). M3 is the largest measure of wealth, to me not using this measure will give untrue results? I don't know this to be true, I am not an economist, but something in my gut tells me this is odd to say the least.

    1. TexasLadyJuanita profile image71
      TexasLadyJuanitaposted 5 years agoin reply to this

      I agree with your thinking.
      Money should represent the value of labor, and products. Different kinds of labor and products are more valuable than other kinds of labor and products. When we inject markets / aka gambling, the value of money gets confused. The value of labor becomes distorted because of the smoke and mirrors of gambling, and when you have unions which do not function properly. With all of our labor laws, unions are obsolete. They are simply the mafia by another name.