Summary

A closer look at the latest Federal Reserve flow-of-funds data reveals some exceptional happenings during last year's fourth quarter, as well as for all of 2004. And it is quite possible these also represent the shadow of unpleasant market events being cast in advance of their arrival.

For those people wondering why open-market interest rates in the United States at the longer end of the yield curve have remained so subdued in the face of the growing inflationary pressures that are now unmistakable, these data provide at least a partial answer: http://www.gillespieresearch.com/cgi-bin/s/article/id=494.