Tuesday, December 30, 2008

Money Multiplier Goes Negative (!!)

This ain't good. My creaky-old Econ 101 memory tells me that money usually runs at about a 3.2 multiplier, which we haven't seen since the mid-'90's.

The period from 'the end of 3.2' to 2008 was kinda 'sticky-gooey' economically, come to think of it...

At any rate, a negative multiplier has serious implications if one is running the Hell out of the printing presses, as MarketTicker 'splains.

The question not answered: is the negative number a result of the money-pumping, or of the crash in housing and other assets?

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