Worry about M3?
Yves has a post about M3 and he notes that financial innovation has made M3 less meaningful.
It just realized that when I read the M3 numbers I see something much worse because I read those numbers and magnify them by the increasing bank leverage that has happened since Greenspan. The M3 numbers in context of where they've come from are insane and scary. And there is no question that leverage has dramatically increases. A house of cards description is mild.
Bottom line for how I see it is there has been enormous expansion of available funds through leverage and questionable debt. It is like a reverse bungee jump, instead of going down in freefall, it has been going up. And there is going to be a problem when the limits of elasticity are reached...