Federal Reserve forecasting and watching
(Warning, complex economics below)

Definitions: custodial account,
equity,
Fed,
M3,
monetize,
sterilize.
Explanation: If one is trying to forecast money growth, especially in the measure called M3, the relationship shown above between Fed custodial account balances and M3 growth or shrinkage is quite good. The three month lag is correct about 70% of the time, and 100% correct on major changes in trend. Well done to Jesse for isolating the relationship, see link to his site below. Do note that this is a static chart, and will not auto update.
The blue-green chart at the bottom shows a much more complex relationship. Its basically M3 divided by Federal Reserve credit made available to the commercial banking system. That Fed credit number reflects actual borrowing that occurs from commercial banks. If one moves that ratio/relationship about one year forward, it turns into a stock market forecasting tool that helps forecast relative tops and bottoms.
Chart original source, used with permission.
