String Music

"Sun don't shine on the same dog's ass everyday, but mister you ain't seen a ray of light since you got here."
--Opal Fleener (Hoosiers)

Chart borrowed from John Mauldin' fine missive showing negative money multiplier effect (M1:M0 < 1). A rare phenomenon.

Translation: money being printed by the Fed is not being pyramided thru the system in the form of credit. In even simpler terms, the Fed is currently pushing on a string in its attempts to inflate.

Altho John notes that the multiplier is at its lowest level ever, would guess that if this series went back to the 1930s we'd observe a similar pattern.

Implications here are deflationary.

One other thing I found interesting is that the multiplier has been in secular decline for 25 yrs. Why? Perhaps it's been getting marginally tougher to leverage the system as the absolute size of debt/credit grows.