PPI History of the Producer Price Index. What this shows is a virtual quadrupling in 30 years. The important question at this point relates to monetary aggregates and the unimaginable effect of stuffing several hundred billion dollars into one quarter.. The analogy is like a pig moving through a python.

A number of scenarios are possible

- Banks loan out the aggregates (they refuse)

- Banks are the mattress and a deflationary spiral ensues (there is other credit sourcing in smaller banks)

- Ever more bailouts bail out the bailouts. Weimar America.

There is no parallel to the monetary aggregate formation to the period of 1929 to 1932. In that time, the Fed stopped lending to stop speculation. The Fed is behaving the opposite now. Deflation is the present, but inflation is the future.

In the last few months have seen greater M3 growth then seen in US History. M3 spikes, as data show, tend to precede a major recessions.

^{Sponsored by AIG - We're the people who need more money to explain why we just spend your money on trips and champagne. See how committed we are? Here at AIG we're spending millions in advertising telling you just how sorry we. Seriously. We'll toast to it.}

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

This week is ode to money holes. Now on cable the talking heads are debating....

Should The Government Stop Dumping Money Into A Giant Hole?

America cannot survive without an industrial base.  We cannot simply be a pure service economy anymore than we can be a pure agricultural one or industrial one.  Our nation is too complex, it's needs are too large to adhere to one type of sector.  The nation would be more at risk to economic cycles if it were to simply go one route or at the very least put most of its focus on say just services.  It would be like many towns in this country where there is only one employer or one type of industry supporting the economy as a whole.  One need only read the latest news about how the City of London is not doing so well because its Financial Services Sector has gone downhill.  Now take that onto an aggregate scale.

But we have alternative car companies who cares about GM or Ford?

Every once in a while in the world of economics an economic indicator will suddenly go crazy. One day the charts all look normal and easy to understand. The next day it suddenly launches into an entirely different world.

What a massive swing in the index means is always open to interpretation (a whole industry exists to analyze these movements), and no one is certain if they are correct until years afterward. Sometimes what it means is more obvious than the why, but the 'why' is ultimately more important.

Welcome, ladies and gentlemen, to another installment of Manufacturing Monday. Today we are going to cover something that has been in the news lately, General Motors.  Well to be exact, the potential bankruptcy of GM, and what it could mean to you.  For many, this is a non-issue, who cares about another car company and a failing one at that?  But indeed, it may just be that a collapse of GM could be worse than that of Lehman Brothers and AIG.  Of course we'll cover, as always, the economic indicators for the past week and what they also mean.  So without further adieu, the Numbers!

The Numbers