Category: Money Supply
The analysis published under this category are as follows.
Saturday, November 13, 2021
How To Shop For The Right Good Online Video Editor / Personal_Finance / Money Supply
By: Submissions
Not all video editing tools can give you high-quality videos. Remember, there are hundreds of tools online. Some of these tools are out to take your money. Some of these tools come with poor features. Getting the best videos from these tools isn’t easy. Thus, it’s important to do your homework property when shopping around for the right editor. Here are key things you should look for in a good video editor.
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Monday, June 01, 2020
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? / Interest-Rates / Money Supply
By: Chris_Vermeulen
M2 Velocity is the measurement of capital circulating within the economy. The faster capital circulates within the economy, the more that capital is being deployed within the economy to create output and opportunities for economic growth. When M2 Velocity contracts, capital is being deployed in investments or assets that prevent that capital from further circulation within the economy – thus preventing further output and opportunity growth features.
The decline in M2 Velocity over the past 10+ years has been dramatic and consistent with the dramatic new zero US Federal Reserve interest rates initiated since just after the 2008 credit crisis market collapse. It appears to our researchers that these extended periods of zero interest rates deflate the capability of money circulating throughout the economy and engaging in real growth opportunities for investment and capital inflation.
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Saturday, November 17, 2018
The Fed's Misleading Money Supply Measures / Interest-Rates / Money Supply
By: Steve_H_Hanke
The most robust national income determination model is the monetarist model. The course of the economy when measured in nominal terms is determined by the course taken by the money supply. Indeed, the positive relationship between the growth rate of the money supply and both nominal GDP and nominal aggregate demand growth is unambiguous and overwhelming.
So, just what is the measure of money that is most suited for taking the temperature of the economy and forecasting its course? Is a narrow metric, like the monetary base (M0), the best? Or, should we focus on broad money metrics, like M3 and M4? For national income determination, the more inclusive the metric, the better. Indeed, for the most complete and accurate picture, one should include all the important components of money supply, not just a few.
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Monday, November 20, 2017
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” / Economics / Money Supply
By: F_F_Wiley
Forget about big hair, Ray-Bans, and Donkey Kong. Don’t even think about Live-Aid, Thriller, and E.T. Above all else, the 1980s were the gravy days of the money supply aggregates.
Beginning in late 1979, the Fed built its policy approach around the aggregates—primarily M1 but occasionally M2, and policy makers also monitored M3 while experimenting with M1B and, later, MZM. But those were just the “official” figures. Economists and pundits debated the Fed’s preferred measures while concocting their own home-brewed variations.
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Thursday, April 28, 2016
Monetary Policies Misunderstood / Interest-Rates / Money Supply
By: Steve_H_Hanke
Ever since the U.S. Federal Reserve (Fed) began to consider raising the federal funds rate, which it eventually did in December 2015, a cottage industry has grown up around taper talk. Will the Fed raise rates, or won’t it? Each time a consensus congeals around the answer to that question, all the world’s markets either soar or dive.This obsession with taper talk – the interest rate story – is simple, but strange. Indeed, it is misguided – wrongheaded. So, why the obsession? It is, in part, the result of a Keynesian hangover. The Keynesians focus on interest rates. The mainstream macro model that is widely in use today is referred to as a “New Keynesian” model. The thrust of monetary policy in this model is entirely captured by changes in current and expected interest rates (the price of money). Money is nowhere to be found, however.
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Tuesday, March 22, 2016
U.S. Monetary Policy Kaleidoscopic Context / Interest-Rates / Money Supply
By: Mike_Shedlock
Dennis Lockhart, Atlanta Fed president, made a speech today trumping up the possibility rate hikes as soon as April.
In his speech, Lockhart cited "sufficient momentum evidenced by the economic data to justify a further step at one of the coming meetings, possibly as early as the meeting scheduled for end of April."
Let's dive into his speech and also put a spotlight on his claim of "sufficient momentum."
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Sunday, March 13, 2016
Money Velocity Proves Q.E. Failure / Interest-Rates / Money Supply
By: Jim_Willie_CB
The current monetary policy is stuck in place. It is highly destructive to banking systems, working capital, and financial markets. Yet it continues ad infinitum, actually until the great collapse. A systemic Lehman event is in progress, as the global financial structure is collapsing. The only remedy is the Gold Standard installation, which is happening, but its architects are from the East. They are labeled as enemies, when the root problem is in the Western banking hive.
Thursday, March 26, 2015
The Monetary Approach Reigns Supreme / Interest-Rates / Money Supply
By: Steve_H_Hanke
We are still in the grip of the Great Recession. Economic growth remains anemic and below its trend rate in most parts of the world. And what’s more, this state of subdued economic activity has been with us for over seven years.In the U.S. (and elsewhere) the central bank created a classic aggregate demand bubble that became visible in 2004. The Fed’s actions also facilitated the creation of many market-specific bubbles in the housing, equity, and commodity markets. These bubbles all dramatically burst, with the bankruptcy of Lehman Brothers in September 2008.
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Thursday, November 06, 2014
The End of QE Is Not the End of Bad Policy / Interest-Rates / Money Supply
By: MISES
John P. Cochran writes:
Recently the financial press and media has been abuzz as the Federal Reserve moved closer to the anticipated end to its massive bond and mortgage backed securities purchases known as quantitative easing. James Bullard, President of the St. Louis Federal Reserve Bank, stirred controversy last week when he suggested the Fed should consider continuing the bond buying program after October. But at the October 29th meeting, the policy makers did as anticipated and “agreed to end its asset purchase program.” However one voting member agreed with Mr. Bullard. Per the official press release, “Voting against the action was Narayana Kocherlakota, who believed that, in light of continued sluggishness in the inflation outlook and the recent slide in market-based measures of longer-term inflation expectations, the Committee should commit to keeping the current target range for the federal funds rate at least until the one-to-two-year ahead inflation outlook has returned to 2 percent and should continue the asset purchase program at its current level” (emphasis added).
Friday, October 03, 2014
The Velocity of Money Myth… / Currencies / Money Supply
By: Alasdair_Macleod
If there is one concept that illustrates the difference between a top-down macro-economic approach and the reality of everyday life it is the velocity of circulation of money. Compare the following statements:
“The collapse in velocity is testament to the substantial misallocation of capital brought about by the easy money regimes of the past 20 years.” Broker’s research note issued September 2014; and
Friday, December 20, 2013
Fiat Money Quantity and it's Increasingly Likely Hyperinflation / Economics / Money Supply
By: Alasdair_Macleod
By November, the most recent month for which statistics are available, the US Fiat Money Quantity (FMQ) had grown to $12.351 trillion. This is $4.96 trillion more than it would be if it had grown in line with the established average monthly growth rate from 1960 to the month before the Lehman Crisis. By this measure monetary inflation since August 2009 is now 67% above trend. This is illustrated in Chart 1 below.
Tuesday, May 21, 2013
Hot Money, Cold Credit - Misguided Monetary Policy / Economics / Money Supply
By: Steve_H_Hanke
Money matters — it’s a maxim of Prof. Milton Friedman that I repeat often in my columns. Since the Northern Rock bank run of 2007 — the "opening shot" of the financial crisis — the money supply, broadly measured, in the United States, Great Britain, and the Eurozone has taken a beating. Recently, in the United States, money supply growth has started to rebound, but only slightly. In the U.K. and the Eurozone, things are much worse. This is cause for concern, because the quantity of money and nominal gross domestic product are closely related.
Not surprisingly, in the U.S., growth has been anemic, at best. In the U.K., the economy has fluctuated between stagnation and recession. And, in Europe, growth has been replaced by the Eurozone’s longest recession ever. Indeed, 9 of 17 E.U. countries that use the euro are in a recession, including France, and Eurozone unemployment sits at a record 12.1%.
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Monday, March 25, 2013
Exponentially Accelerating Money Supply / Economics / Money Supply
By: Alasdair_Macleod
The monthly figures for the US dollar components of Austrian, or True Money Supply, for February are now in. TMS plus excess reserves amount to the quantity of money that can be drawn down without notice, including time deposits that in practice can be instantly drawn down without notice, only foregoing interest. This is shown in the long-term chart below.
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Tuesday, November 27, 2012
Age Of Illusionists, Focus on Government Spending and Money Supply / Economics / Money Supply
By: Steve_H_Hanke
Watching Barack Obama and Mitt Romney duel in the presidential campaign should have convinced the spectators that we live in an age of illusionists. Few of the assertions and conjectures thrown around have been subjected to what the political chattering classes deem to be the indignity of factual verification.
Wednesday, October 24, 2012
U.S. Monetary Cliff? Fed Dilemma Will Continue for Many Years / Economics / Money Supply
By: Axel_Merk
As the presidential election is rapidly approaching, little attention seems to be getting paid to the question that may affect voters the most: what will happen to the “easy money” policy? Federal Reserve (Fed) Chairman Bernanke’s current term will expire in January 2014 and Republican candidate Mitt Romney has vowed that if elected, he would replace Bernanke. Given the tremendous amount of money the Fed has “printed” and the commitment to keep interest rates low until mid-2015, the election may impact everything from mortgage costs to the cost of financing the U.S. debt. Trillions are at stake, as well as the fate of the U.S. dollar.
Wednesday, October 24, 2012
Inexorable Money Supply Growth / Economics / Money Supply
By: Michael_Pento
The economies of Southern Europe continue to experience extreme duress. For example, the bad loans of Spanish banks jumped to 10.5% in August, which is up 17 straight months and has increased from just .72% at the end of 2007. However, the answer provided by governments and central banks to propel the economy is to create more of the same condition that brought about the problems in the first place. That is, to increase the level of base money in the hopes of increasing the rate of broad money supply growth and inflation. But despite the fact that inflation is already growing at 2.6% in the Eurozone, Mario Draghi is still promising to do whatever it takes to dilute the Euro’s purchasing power and create more inflation.
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Monday, February 14, 2011
Economists Lost in a Maze of Money Aggregates? / Economics / Money Supply
By: Robert_Murphy
One of the most important concepts in economic theory is the quantity of money. However, when going from theory to practical application, things get messy. In the real world, it's not obvious how to count up the amount of "money" in the economy at any given time.
Thursday, February 03, 2011
Inflationary Indications of the Broadest Measure of Money Supply / Economics / Money Supply
By: Richard_Daughty
The Gold Report interviewed John Williams of ShadowStats.com, who said, "I continue to track M3, the Fed's broadest measure of the money supply until it ceased publication in March of 2006. Generally, the broader the measure of systemic liquidity, the better it serves as a predictor. In terms of giving a signal for the economy, you have to adjust the growth for inflation."
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Wednesday, December 22, 2010
Monetary Watch December 2010: The Money Supply, a Triple From Here? / Interest-Rates / Money Supply
By: Michael_Pollaro
Our monthly Monetary Watch, an Austrian take on where we are on the monetary inflation front and what’s next…
Wednesday, November 03, 2010
Making Sense of the Money Supply / Economics / Money Supply
By: Chris_Riley
With the Fed’s rapid expansion of the monetary base in recent years, many commentators have pointed out that this has not led to growth in the money supply and hence the Fed is powerless to deal with “deflationary” forces in the economy.