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Fantasy Land Financial Analysis for Investors

Written by Gary North on July 24, 2013

This headline appeared on the MarketWatch site.

BEIJING (Caixin Online) — The monetary policies of major economies are diverging for the first time since 2008. The euro zone, Britain and Japan are sustaining quantitative easing, while the United States, China and other major emerging economies are on a tightening path.

Here is the most recent chart from the Federal Reserve Bank of St. Louis. This is the adjusted monetary base over the past 12 months. This reflects the monetary policy of the Federal Reserve. The Federal Reserve is in control of the monetary base.


Perhaps we should look at the longer-range policy. Do you see any change since 2009?


The MarketWatch writer draws a conclusion from this “tightening.” He writes: “The Fed’s tightening is primarily to prevent a full-blown asset bubble. Its burst could bring another financial crisis.” But if the FED is not tightening, what happens to the asset bubble?

We are also told that the Eurozone is experiencing quantitative easing (monetary inflation). Does this chart from Cumberland Associates indicate quantitative easing or quantitative tightening?


Tightening, you say? Well, then, maybe you should write for MarketWatch, because you can distinguish up from down.

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6 thoughts on “Fantasy Land Financial Analysis for Investors

  1. The chickens are on the way to the roost!!! The day of reckoning is around the corner…..be afraid….be very afraid! The last 5 years of QE has been nuts!!!

  2. Texas Chris says:

    There's no reason to be afraid. If you've prepared.

  3. Yes I know…as I gaze at my assortment of gold!!! Not a very large percentage have!

  4. The only reason to add money to the economy is to cover its growth. Our economy has really not grown much at all yet the money supply is being dumped into it as though it was booming. Who will they blame when the whole system collapses? Cloward & Piven?

  5. Uncle R. says:

    When it finally comes apart – REALLY falls apart – they'll do the same thing that governments always do in times of crisis. They'll start a war. We'll be treated to lots of death to go along with our poverty.

  6. 1baronrichsnot says:

    I see no tightening, none at all, wide open printing, when they tighten we will know, stock market will fall about 4000 points, (a bubble), gold will head up, (although I see nothing available for sale at a bargin) food will go out of sight, (300%) gasoline target is around 22 bucks a gal., cars will be high, very high, made of things like rare earth materials, steel, copper, silver, synthetics, computers, and burns gasoline (if you want to go somewhere without plugging in for 12 hrs.) then will cost through the nose, electricity will necessarily skyrocket (obamas words). I don't believe anyone would want to build anything for sale, if no one has the money to buy it. No income, no job(ninja's) and also no sword. Food will be the best to barter with, gold you can't eat, you might buy the store with it, but baron, no food.. Just saying