Mike Maloney - the money supply has vanished & credit has collapsed

11 May 2011
[Thank you very much Mr Maloney. He argues that you need to look at the money supply and more importantly that particular portion of it that is relevant. This is the key to understanding the whole inflation v deflation debate that has so far stumped practically everybody. I wonder what that 'blue portion' on the slide he was showing was]

"This is an emergency. There is something going wrong here. If they ended quantitative easing there is a huge deflation it would end in an implosion. If they continue it the dollar just continues losing value and we go into a crisis of confidence. There is no escape. You can't do what they do to the monetary system (cheating gold) and not have it come back to haunt you some day.
M3 is a highly circulating portion of these digits that the banks and the Fed make up. It is the portion of the currency supply that reflects our inflation and deflation.
It's collapsing. The reason the Fed is inflating the money supply is because of this. It's right here. Deflation is Ben Bernanke's worst nightmare and it is happening right now. The blue-portion is the efficient portion of the currency supply.

This has never happened before! Total consumer spending is collapsing. I made these charts of the Fed's website. It's collapsing. This hasn't happened before. This is the first time since the Great Depression folks that the currency supply has started to collapse.
These are Real estate loans made by commercial banks -- collapsing.
This is total revolving credit -- collapsing. And look at this -- it is collapsing by 20%
These are alarm bells ringing off saying you better man the lifeboats."

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