- Jim Costa
Jim’s Daily Rant. M1 and M2 money and the Big Banks.
M1, M2 and M3 are measurements of the United States money supply, known as the money aggregates. M1 includes money in circulation plus checkable deposits in banks. M2 includes M1 plus savings deposits (less than $100,000) and money market mutual funds. M3 includes M2 plus large time deposits in banks. Source
This morning I watched the Bo Polney Interview in which he said to watch for a major jolt to U.S. Banking around May 15th. Later he suggested the jolt will hit the big banks.
I just finished watching US Government May Freeze American Bank Withdrawals As Currency Panic and Capital Flight Mounts: Macro Guru Hugh Hendry.
We know that the Fed is trying to force all regional banks to be taken over by the big Manhattan banks, we are told to “consolidate and control them better.” We currently see the M1 and M2 money supply dropping drastically in the U.S. and I scaring the hell out of the bankers.
So what does all of this mean? If Polny is right about the shock coming to the big Banks in a week, what could cause it? Let me inject an idea here.
The major Big Banks don’t have a lot of average Joe depositors. Instead they have large corporate accounts. This is because if you do any business with those banks, such as a loan, you must move all of your banking business with them first. These are big money accounts.
Now I remind you that other countries have tried to limit bank withdrawals before. Talks of doing so can spook the corporations into acting hastily. This could also be forced reactions if at the same time you learn that the credit you depend on for your business or business model to run smoothly is being cut off.
Now wouldn’t that be an incentive to wire out most of your funds in order to keep them safe? This could be another two day rout to take down the big banks, all with a push of the button.