A tidbit from a story on the arcane subject of money supply might be the scariest thing I’ve seen in a week chock full of scary things:
Mr Bernanke no longer pays attention to the M3 data. The bank stopped publishing the data five years ago, deeming it too erratic to be of much use.
This may have been a serious error since double-digit growth of M3 during the US housing bubble gave clear warnings that the boom was out of control. The sudden slowdown in M3 in early to mid-2008 – just as the Fed raised rates – gave a second warning that the economy was about to go into a nosedive.
That’s right. Our central bank chief doesn’t care how much money there is.