Discontinuance Of M3 Will Save Fed 0.00000699% Of Income

Wednesday, January 11, 2006

As the Federal Reserve has cited savings of about $1.5 million as one of the reasons for the discontinuance of the M3 money supply data set, today's press release about incomes and expenses at the Fed in 2005 comes in handy to requestion the true motives behind this move towards intransparency.
Comparing the figures with those of 2004 show that the Fed's total net income rose 10% to $23.521 billion, the biggest part stemming from a 30% rise in Open Market Operations to $28.959 billion. Other Income rose 17% to $386 million and Fee Income advanced 4% to $901 million.
Operating Expenses rose 4% to $2.116 billion while the Treasury can enjoy an annual check that has grown 19% to $21.454 billion.
The biggest relative winners are the private shareholders of the Federal Reserve. The dividend payout to this exclusive cercle of America's elite rose a staggering 34% to $781 million.
With the discontinuance of M3 data after March 26 the private owners of the Fed will certainly enjoy an ever bigger dividend for 2006. Saving $1.5 million by abolishing M3 data amounts to 0.00000699% of the Fed's annual net income of last year. These folks sure know where to save.
For the alarming trend in M3 growth I refer you to the posts
Least You Can't Say You Didn't Know
M3: This Is What Bernanke (And Others) Have To Say
ECB: M3 Slows A Bit, Gold Sales Continue - Worldwide Interest in Burial Of US M3
Fed Says US M2 Resembles Eurozone M3
ECB Very Worried As M3 Growth Is Risk To Price Stability
Fed Wants To "De-Emphasize The Role of M3"
M3 - Deafening Silence In The MSM - And The Federal Reserve
M3 - There Is Always A Funny Side To A Sad Story
Unpleasant Trend - Fed Counters By Stopping Release of M3 Money Supply Data
For a good read on the correlation between money supply and stock market performance surf to Robert McHughs editorial "The Fed's Money Supply Armament Is Underway", just in case you wondered about the strong performance of the US stock market.
UPDATE: The Fed's budgets for 2005 and 2006 can be downloaded here (pdf).

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