The Fed discontinues the release of M3 data and the current EUR/USD since

[sub0]

Looking back, what do you think about this versus where the EUR/USD is now? I have attached a chart that shows what has happened since. Any correlation or significance to this that you'd like to point out or comment on?

Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.


http://www.federalreserve.gov/releases/h6/discm3.htm

 

[sub0]

Fed discontinues M3 data vs. EUR/USD since

 

[TradEStar]

Great post to show what happened after a very big story that was ignored by much of the media.

 

[Rhody Trader]

I'm waiting for someone to explain the causality of all this. How does the discontinuation of collecting/reporting a statistic tie in with the value of the USD?

 

[Bernard111]

Quote from Rhody Trader:

I'm waiting for someone to explain the causality of all this. How does the discontinuation of collecting/reporting a statistic tie in with the value of the USD?

The M3 hides the printing of $$$...

 

[Ivanovich]

Out of curiousity, do you believe the ECB isn't printing Euros?

 

[Rhody Trader]

Quote from Bernard111:

The M3 hides the printing of $$$...

I presume you mean to say not publishing the M3 hides the printing of $$$.

Since there are umpteen other money supply statitics available from the Fed and elsewhere, I really don't think they're trying to hide anything.

 

[Gyles]

M3 being a measure of money including the money created by the government. This was required as the country (USA) was broke due to the war. They required the money to pay for the same, so they printed the same.

However, when you print money, you are devaluing its existing currency. Besides, this they did not want the public to know as to how bad the situation had become.

 

[Rhody Trader]

Quote from Gyles:However, when you print money, you are devaluing its existing currency. Besides, this they did not want the public to know as to how bad the situation had become.

True enough, but only assuming that you are not taking roughly equals amounts of money out of circulation via taxation and/or borrowing. Government tax receipts are running at very high levels and so is the debt level. I don't have the specific figures, so I'm not sure if it's a direct offset or a little over on either side, but it's definitely not a one way street of money supply increase.