In Remembrance of a First-Rated Economist: Doug Gillespie
Posted by Frugal on June 19th, 2006
I just learned from www.financialsense.com and http://www.prudentbear.com/ about the news of Doug Gillespie’s passing away on Jun 15, 2006. His website at Gillespie Research provides one of the best economic research on US economy, and exposes inconsistencies in government economic data. I subscribed to his website for a free trial once, and his economic research was very solid and detailed. Together with his partner John Williams who provides research on Shadow Government Statistics, they provided the investment community for the extremely needed research on what’s really behind government economic data. For every article that I could get my hands on from his site or from www.financialsense.com, I would always read them with great enthusiasm.
Doug Gillespie was one of the few economic analysts that I have exchanged emails and actually talked over the phone. He was a humorous, light-hearted person from the two conversations that I had with him. And if I am ever asked by anyone to use two words to describe him, I will say that he was a terrific TRUTH FIGHTER without any doubts. His website was mostly about uncovering the real truth behind US government statistics.
The reason that we exchanged emails and talked over the phone was that I forwarded an email from Federal Reserve to him for help. Yeah, from the Public Affair Office at Federal Reserve directly. I’m one of those pesky truth-seeking people that you just can’t get rid of. Right after US Federal Reserve announce that they will stop publishing M3 money figure, I felt so mad as a taxpayer that I actually went to the website of Federal Reserve and wrote to them for why they were planning to stop publishing M3. I bet that the public relationship person (I won’t give out names here, but call him Andrew) would never have thought that I would forward his standard canned reply to an economist (Doug Gillespie). Since I was not an economist by training, so there were a few details that I couldn’t understand from Andrew’s reply. Doug Gillespie was very gracious to clear up those points for me, and actually replied to Federal Reserve and cc me on that email. Obviously, he was not tactful as I was. As soon as Doug replied to that email, Andrew realized that I was not one of those stupid general public that he could simply give me a bunch of sophisticated economic talks to scare me away. Guess what Andrew did? He just stopped replying Doug’s and my emails.
Unfortunately, what Andrew faced was a pesky little truth seeker. I asked for an email reply once, and then twice, and then the third time, as a taxpayer, I demanded him to reply my email on why Federal Reserve stopped publishing M3, or else I was going to use unconventional methods, such as Freedom of Information Act (FOIA for short) and get my hands on everything behind the scenes. After my threat, Andrew eventually replied me, pretty much with the same economic rubbish as in the very first email, and at the end of his email, he told me that he will NOT reply any further emails from him, and that was the last communication that he would do (read his email at the end of post). Talk about government conspiracy. I almost felt like there was a giant secret scheme behind the stop of M3 publication. Later, I even contacted the people: Carol R. Low and Jean McLaughlin at FOIA. I also emailed my local Congressman to support another Congressman Ron Paul at Texas for his legislative efforts on forcing FOMC to re-publish M3 (read one of the best article on the understanding of gold by Ron Paul here).
In any case, Doug and I couldn’t get any reasonable answer from Federal Reserve. They say “the cost of collecting the data and publishing M3 now seem to outweigh the benefits”. (something like 0.0001% of their budget, while they prints paper money all the time). That was the most un-funny joke and the biggest lie that I’ve ever heard from anyone, and that was from our Federal Reserve Board. I just can’t make myself to have any respects whatsoever for Greenspan or Bernanke who are treating US citizens stupidly.
I am very honored to have talked to Doug over M3 money issues, and grateful for his help in digging out the truth. The world will greatly miss such a Truth Fighter, a rare species that is becoming extinct in the mundane and nebulous world.
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Here is the first email reply from Federal Reserve:
The Board’s publications, press releases, consumer information and brochures, testimony and speeches, the Board’s regulations, legal interpretations, and transcripts of meetings will also be posted on our public website. From the same site, you can also access the Federal Reserve System’s Public Information Catalog (newyorkfed.org/publications/ frame1.cfm) of the Federal Reserve Bank of New York. You may also wish to use the Index to Federal Reserve economic research, a more sophisticated search facility, available at: frbsf.org/publications/fedinprint/index.html.
I hope this information is helpful.
Sincerely,
YYY or Andrew
Public Affairs Office
Here is Doug’s email & comments:
M3 does not appear to convey any additional information about economic activity that is not already embodied in the M2 aggregate. The role of M3 in the policy process has diminished greatly over time. Consequently, the costs of collecting the data and publishing M3 now appear to outweigh the benefits.
Doug Gillespie
Gillespie Research Associates
Ho-Ho-Kus, NJ, USA 07423
www.gillespieresearch.com/
gsrdr@aol.com
Here is the last email from YYY or Andrew:
Dear Mr. XXX or 1stMillionAt33:
This is in response to your most recent correspondence concerning the M3 aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and eurodollars. The announcement was made in the current H.6 Release (Money Stock Measures), available at http://www.federalreserve.gov/releases/h6/Current.
Government statistical reports must be reviewed every three years, on a staggered basis, in accordance with the Paperwork Reduction Act; the Office of Management and Budget requires federal agencies to submit a report justifying the continuation of data series. Like all other federal agencies, the Federal Reserve must submit all of its releases to a periodic cost/benefit analysis, identifying the cost to the institutions collecting the data and to the agency. Also, our searching of the economic literature revealed that very few economists used that aggregate: M3 does not appear to convey any additional information about economic activity that is not already embodied in the M2 aggregate. Further, the role of M3 in the policy process has diminished greatly over time. Consequently, the costs of collecting the data and publishing M3 now appear to outweigh the benefits. As it happened with the L aggregate in 1998, it, therefore, was very difficult to justify published data that very few people use.
I hope this information is helpful. I will not respond to any further correspondence.
Sincerely,
YYY or Andrew
Public Affairs Office
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