Britannia Radio

Breaking from Moneynews.com Report: US Money Supply Plunging at 1930s Rate The United States’ M3 money supply reportedly is plunging at an accelerating  pace similar to that in 1929 to 1933, despite near-zero interest rates. The M3 data — which include a broad range of bank accounts and are tracked  by British and European experts for danger signs about the U.S. economy —  began shrinking a year ago, London’s Daily Telegraph reported. That race has  since picked up speed. The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to  April, amounting to an annual rate of contraction of 9.6 percent, the report said.  The assets of institutional money market funds fell at a 37 percent rate, the  sharpest drop ever. "It’s frightening," Professor Tim Congdon, from International Monetary Research,  told the newspaper. "The plunge in M3 has no precedent since the Great Depression. The dominant  reason for this is that regulators across the world are pressing banks to raise capital  asset ratios and to shrink their risk assets. This is why the US is not  recovering properly," he said. White House officials plan even more spending, despite warnings from the IMF  that the gross public debt of the United States will reach 97 percent of GDP  next year and 110 percent by 2015. Larry Summers, President Barack Obama’s top economic adviser, has asked  Congress to "grit its teeth" and approve a new financial boost of $200 billion  to keep growth on track. "We are nearly 8 million jobs short of normal employment. For millions of  Americans the economic emergency grinds on," he said. Meanwhile, a top Federal Reserve official said the central bank will watch  the U.S. economy's progress through autumn and into 2011 as it decides how  long it will hold interest rates at ultra-low levels, Reuters reported. In an interview earlier this week with Reuters Insider television in London,  St. Louis Federal Reserve Bank President James Bullard said the U.S.  economic recovery was on track and that the Fed was keeping a close eye  on risks stemming from the euro debt crisis. He said the Fed could not make any promises on when it would change its  monetary policy stance. "The economy is doing fairly well so far," Bullard said. "We have some risk, we have the situation in Europe we're watching very  closely, but we'll see how things proceed through the fall and into 2011." The Fed has chained rates to near zero since December 2008 to help steer  the world's biggest economy through the financial crisis and resulting recession