The Mint Money Supply Digest for May 14, 2013

5/14/2013 Portland, Oregon – Pop in your mints…

Today finds US equity markets up, in fact, they are eclipsing new nominal records.  The US economy must see a screaming recovery on the horizon, right?

While the economic recovery, which began in the dark days of 2009 continues to plod along at a predictable pace, there are two factors that are contributing significantly to the determined rise of the equity markets.

First and foremost, strange as it may seem, the US Government is actually paying down debt.  A combination of sequester savings, the fiscal cliff with its notable 2% payroll tax increase, and a slew of paybacks on public “investments” made during the financial crisis has the US Treasury somewhat awash in cash, which in turn has caused the supply of US Treasuries on the market to shrink.

In the meantime, the Federal Reserve still has the monetary spigots on full blast and the Primary dealers, who have had their spigots trained on Treasuries, are now directing the overflow into equities, which has caused stocks to rise despite a rise in the US Dollar index (which just passed 83) and the fact that roughly 50% of individual investors are completely out of the stock market.  Once Ben Bernanke has his way with the USD and the individual investors get off the fence, this rally will run quite a ways.

The second, and more important factor that is propelling the US Stock indices to record highs, is that it is Tuesday, the day when most people’s 401K contributions and auto investment plans find their way into equities.  Zerohedge has provided some interesting analysis as to the effect of Tuesdays on stock indices returns which can be ready here:

This is your S&P; This Is Your S&P Without Tuesdays

The vanilla crisis is moving ahead full throttle.

Stay tuned and Trust Jesus.

Stay Fresh!

David Mint

Email: davidminteconomics@gmail.com

Key Indicators for May 14, 2013

Copper Price per Lb: $3.27
Oil Price per Barrel:  $94.07
Corn Price per Bushel:  $6.52
10 Yr US Treasury Bond:  1.94%
Mt Gox Bitcoin price in US:  $119.00
FED Target Rate:  0.12%  ON AUTOPILOT, THE FED IS DEAD!
Gold Price Per Ounce:  $1,427 THE GOLD RUSH IS STILL ON!
MINT Perceived Target Rate*:  0.25%
Unemployment Rate:  7.5%
Inflation Rate (CPI):  -0.2%
Dow Jones Industrial Average:  15,176
M1 Monetary Base:  $2,645,900,000,000 LOTS OF DOUGH ON THE STREET!
M2 Monetary Base:  $10,475,500,000,000