>Don't know anything about Dick Eastman--found this story to be pretty
>good.
>
>Tom Lehman
>
>
>
> Relative Decline of M1 Destroying the Middle Class
> by Dick Eastman
>
>The middle class is shrinking because the money supply that the middle
>class uses, M1, is being contracted while the wide-transaction monies
>exclusively used by the financial elite and multinational corporations
>are
>being expanded.
This sounds pretty weird, as if the Fed were in some conspiracy to destroy "our" kinds of money and boost "theirs." If this is a way of saying that the rich are getting richer and that financial capital is concentrating in institutional hands, ok, but there are other ways of making the point without descending into the arcana of the various Ms. Three-quarters of the population barely has any spare cash, and of the quarter that does, they've shifted it out of banks (where it would show up in the Ms) and into the financial markets (where it won't show up in the Ms). As for M1, which consists of currency and checking accounts, it's shrinking because people keep much smaller checking balances than they used to. They buy stuff with credit cards and keep their spare cash, if they have any, in interest-bearing accounts if possible. The currency component is actually growing - mainly because there are so many greenbacks circulating outside the U.S. in Latin America and Russia.
Doug