Thursday, June 17, 2010

Monetary Trends – July

After trying to convince you that “quantitative easing” is okay because it had been done before, we can get on with the latest St. Louis Fed’s monetary compilation current through June 15th, 2010.

Of note is a now year over year negative MZM. This has caused MZM velocity to turn slightly upward (still at historic low levels), but we’ll see if that’s maintained as growth slows. Another point is the S&P 500 trailing P/E that has come down substantially. Again, I point out that the only reason its anywhere near historic range is due to fraudulent accounting. The spike to record P/E’s was caused by the requirement to mark to market, once removed it dove. Were the financials and quasi-financials to truly mark “assets” to market there would literally be NO S&P 500 earnings and thus the P/E would be mathematically infinite. And it’s not just fraud in the financials, it’s rampant, including our own government statistics. With that feel good nugget, here’s Johnny…

July Monetary Trends