The argues that m3 is not it's fault, and that is why it stopped publishing it. Nevertheless they are wrong, because one can't baloon M3 without dropping reserve requirements to practically zero, and allowing the banks to operate as total moral sluts, caring nothing for the risks , as they figure that dady fed will always bail then. The moral hazard was contangious down the credit pyramid, thus allowing credit to baloon, as the Fed looked the other way, and says it's not my fault.
the author thoughts are vomitous.
Ps. this thread should shared with the chickens.
The Fed has in the last year given about about $1T in loans to banks to solve the "liquidity crisis". If these were given in the form of Federal Reserve checks which can only be deposited back into the Fed, wouldn't this increase bank lending limits by $10T each time (due to a 10% fractional reserve) and as much as $100T after the money multiplier trickles through the system? The M3 was about $10T in 2005 when the Fed stopped reporting it.
All of this of course requires the banks to start lending though, which gives me the mental image of the credit crunch being like a massive dam containing a lake of dollars which the Fed has turned into an ocean...