ecendented expansion of the M3 money supply has resulted in speculation regarding the intent of the Federal Reserve.

Is the doubling of the money supply necessary to preserve liquidity in the capital markets if another terrorist incident is staged before the November election?

Political-economic analyst Al Martin reports that "there are more U.S. 10-year notes now sold short than there are 10-year notes in the float to cover those positions, and that is an enormous negative implication because the only time that the 'smart money' sells U.S. Treasury paper short in such size is when they expect an economic debacle.

"To have a record short position in the Treasury bonds," Martin continues,"means that a) you expect another market debacle; b), that debacle is going to be either something to do with inflation (an inflationary debacle), a sudden surge of inflation, or a sudden fall in the U.S. dollar.

"This is the kind of short position that, combined with the very same people massively liquidating U.S. stocks, and massively purchasing gold (Greenspan has on several occasions noted the mass accumulation of gold by 'smart money ' in the United States) -- these are things that the people who are doing it must be under the impression that there is going to be, not just a meltdown, but an economic collapse."

"It's interesting how these pro-Bush pundits try to fudge and maneuver around the truth. But we are now seeing market positions never before seen, a record short position in long-dated U.S. Treasury paper,which means somebody expects an inflationary surge and a debacle.

"There is also a record amount of insider selling, (selling of previously restricted stock now free to sell by corporate officers, principals, and directors) which is a proxy for 'smart money' selling. Insider selling is now running at 53-to- 1 on a dollar-volume basis. These are incredible amounts of money. The insider selling alone is now accounting for about $50 billion a month coming out of U.S. equities. The only reason equities haven't felt it is because of, a) derivative long positions, and, b), because of the increase that we've seen in the last 2 months in public buying from mutual funds and the so-called small retail 'sucker buying.' 'Sucker buying' is keeping it all afloat.

Martin's conclusion? "If you are a flag-waver and a NFWC (member of the Nave Flag Waving Crowd), then you can count on being the ultimate bag holder."

###

For the rest of the story and how these implications tie in with the unprecedented powers granted to the Bush Cheney Regime through the USA Patriot Act I and Patriot Act II, subscribe to Al Martin Raw.com: Political, Economic and Financial Intelligence, just $6.95 per month for online subscription.

Click here for more information on subscription Al Martin Raw.com: Political, Economic and Financial Intelligence") log on and subscribe to AlMartinRaw.com: Political, Economic and Financial Intelligence (http://www.almartinraw.com)

* AL MARTIN is an independent financial, economic and political analyst with 25 years of experience as a trader on NYMEX, CME, CBOT and CFTC. As a former contributor to the Presidential Council of Economic Advisors, Al Martin is considered to be a source of independent analysis for financially sophisticated and market savvy investors -- or those who want to increase their learning curve regarding the realities of today's global markets.

After working as a broker on Wall Street, Al Martin was involved in the so-called Iran Contra Affair as a fundraiser for the Bush Cabal from the covert side of government.

His memoir, "The Conspirators: Secrets of an Iran Contra Insider," provides an unprecedented look at the frauds of the Bush Cabal. His weekly column, "Behind the Scenes in the Beltway," is published weekly on Al Martin Raw.com, which also publishes a bimonthly newsletter called "Whistleblower Gazette."

--------------------------------------------------------------------------------