The continued improvement in initial unemployment claims, the good employment numbers from December, and a number of other indicators are showing an economy that is starting to grow again, with a possibility of growth picking up to a reasonable or even robust pace. The one fly in the ointment is the Fed, which continues to pursue policies that restrict growth in the broad money supply. With a semi-permanent decrease in velocity (the speed at which money circulates through the economy) due to restructured capital tiering for reserve requirements, what used to be reasonable increases in currency no longer translate into increases in the broader money supply (M3). Bank reluctance to lend adds additional downward pressure to velocity. Don't expect anything to change monetarily between now and the election. Prepare for growing pains along the way to a resumption of modest growth.