Larry,
Much ado has been made recently about the fed canceling the M3 figures. Can you explain what M1, 2 & 3 are exactly? Also is there a big difference between M2 and M3. Is it possible to get a relatively accurate guestimate on M3 by the M2 or M1 numbers? Do you think the government is canceling the M3 stats to try and hide the level of money creation or are they really unnecesary like the fed claims?
M1 is the cash and change you have in your pocket plus checking accounts. M2 is M1 plus savings accounts, money market accounts, and C.D.'s of less than $100K. M3 is M2 plus deposits of over $100K, including C.D's, Eurodollars, and repurchase agreements among financial institutions.
Also is there a big difference between M2 and M3.
It seems to me there is. M3 includes the big money.
Is it possible to get a relatively accurate guestimate on M3 by the M2 or M1 numbers?
I don't know. The Fed thinks it's possible. Some analysts disagree.
Do you think the government is canceling the M3 stats to try and hide the level of money creation or are they really unnecesary like the fed claims?
I'm not a conspiracy theorist. I don't think the government is trying to hide the level of money creation but the black-helicopter crowd would disagree. I just think by the nature of government that the bigger it is, the more incompetent it is. Therefore, I wouldn't be surprised at all if the elimination of M3 turns out to be a bad decision.
I wish I could be of more help, Jim. But I'm just another investor trying to make a buck. I learned a long time ago to not pay much attention to things out of my control and things that have nothing to do with my investment decisions. And whatever the Fed decides to do in reporting money supply qualifies on both counts.