Credit expansion slows down in October Nov 12, 2009
By the end of October, the broad money supply, or M2, grew 29 ... The narrow measure of money supply, M1 (cash in circulation plus corporate current deposits), was up 32. (People's Daily Online, China)
The Lost Decade Nov 12, 2009
The cause of this decade's malaise: Debt (caused in large part by an insanely loose money supply in the wake of 9/11 and lazy, yield- chasing bond investors). A culture of overconsumption/housing bubble (people willing to take on the new supply of debt). (Slate)
Economic growth strategies must be holistic - Dr Abbey Nov 12, 2009
"The policy response in the midst of this dilemma is to raise the money supply resulting in a jump in the rate of inflation without any marked improvement in the employment situation," he said. Dr Abbey described the dilemma Ghana faced in policy making in present circumstances as a situation in which the economy was inflating and stagnating at the same time. (Ghana Web, Ghana)
Economists Forecast For 2010 Looks Better, Relative To This Year Nov 11, 2009
10, 2009) Indiana University economists presenting their annual forecast on November 5 are confident that 2010 is going to be better than this year. Unfortunately, 2009 was "really, really awful.". (Science Daily)
Market Risk: Key Signals to Watch Now Nov 11, 2009
When the government starts to rein in the money supply, he says he would expect to see price appreciation in small-caps slow. In preparation,Contango is tweaking its portfolios, shifting to an allocation that emphasizes large-caps instead of a broader mix of small-, mid-, and large-caps. (BusinessWeek)
China's consumer price index (CPI),a main gauge of inflation, dipped 0.5 percent year on year in October, the National Bureau of Statistics (NBS) said Wednesday.• China's new loans sharply down in Oct. Nov 11, 2009
The broad M2 measure of money supply, which covers cash in circulation and all deposits, was up 29 ... Annual growth of the narrow M1 measure of money supply, which covers cash in circulation plus current corporate deposits, accelerated to 32. (Xinhuanet, China)
Silver possesses good investm00004000ent potential Nov 9, 2009
Such a shift in distribution of demand and supply is a reaction to a weaker US dollar, a rise in money supply and concerns over inflation following the massive injection of liquidity into global monetary systems since 2008. While bouts of profit booking can cause intermediate corrections, $980-1000 could now act as a strong support range. (India Times)
No single approach will fit all conditions; the maths is crucial Nov 9, 2009
Nedbank group chief economist Dennis Dykes points out that if money supply had been targeted as monetarists prescribe, the credit bubble in the US would not have reached disastrous proportions. Both interventionist and non-interventionist approaches have worked in certain circumstances and have failed to work in others. (Business Report, South Africa)
Money supply growth at 18.3% Nov 7, 2009
Money supply growth at 18 ... Money supply growth at 18 ... The annual money supply growth now stands at 18. (India Times)
The Ghosts Of '38 Nov 6, 2009
Worried about budget deficits and the possibility of inflation, the Fed contracted the money supply. As it did, the newly enacted Wagner Act raised labor costs, encouraging many companies to lay off workers. (Investors Business Daily)
Bank pumps $41B into UK economy Nov 6, 2009
Bank pumps $41B more into UK economy - CNN.com. Bank pumps $41B more into UK economy. (CNN -- World)
Letter for Thursday, November 6, 2009 Nov 6, 2009
There are numerous economic theories attempting to explain: the Austrian business cycle theory of wasteful mal-investment; the Keynesian school of macro aggregate demand; the monetarist school of money supply; and so on. The economists promote these theories to whatever political party is in power but don t have a pragmatic solution to unemployment. (Lihue Garden Island, HA)
PAUL KRUGMAN: Stimulus plan too little of a good thing Nov 5, 2009
The bank's monetary policy committee began its monthly two-day meeting on Wednesday, a day before it announces its latest decision on interest rates and quantitative easing, its strategy of stimulating the economy by inflating the money supply. Markets are waiting to see if the amount will be increased, and if so, by how much. (Fresno Bee -- Opinion)
Stephen Moore: Obama an Economic Failure Nov 5, 2009
Bernanke styles himself as the man who saved America from another Great Depression and preserved global capitalism by helping conceive the bailouts, stimulus plans, and the gigantic surge in the money supply to try to flood the economy with liquidity. It is hard to see how this savior tag can be accurate, given that the unemployment rate in the U.S. has doubled on his watch, with 7. (Newsmax)
The catastrophe insurance policy through history Nov 5, 2009
This is not only a developed world problem, with China seeing money supply growth of over 150 percent in the past year. Fundamentalists will argue that the price of gold is justified when one looks at the cash costs of production of the global gold mining firms, which has risen to an average of $820 an ounce, justify a much higher spot price in order to make expansions viable. (Business Report, South Africa)
Bernankeism - the artof spreading starvation Nov 5, 2009
Yet, despite disastrous effects on the US economy and repeated reminders of the Japanese lost decade, Bernanke was adamantly persistent with his unlimited money supply and zero interest rates, claiming that Japanese were neither inventive in their policies nor experts in Great Depression policies ... Or how could China be criticized for currency depreciation when it was strongly urged to expand its money supply at 30% a year ... Early monetarists, called the Currency School, noted that a central... (Asia Times Online)
Bank of England Faces Key Stimulus Decision Nov 5, 2009
The bank's monetary policy committee began its monthly two-day meeting on Wednesday, a day before it announces its latest decision on interest rates and quantitative easing, its strategy of stimulating the economy by inflating the money supply ... Boosting the money supply is done during serious downturns in hopes it will get credit flowing to businesses so they can operate and expand ... "The case for more stimulus in the U.K. will be strengthened by signs that the 175 billion of asset... (ABC News -- Business)
Economic Myths and Irrelevancy Nov 4, 2009
The most important part of that failure were the actions by the Federal Reserve Bank that led to the contraction of the money supply by 25 percent ... Location: CT Reply # 1 Date: Nov 4, 2009 - 5:38 AM EST Ryan re money supply As I reread the piece, I think what Williams meant to convey was the coupling of the contraction of money supply followed directly by Smoot-Hawley ... Location: TX Reply # 2 Date: Nov 4, 2009 - 4:03 AM EST good article but I still don't see how a contraction in the money... (Townhall.com)
Bernanke learns fromthe wrong crash Nov 4, 2009
As this column has discussed in the past, the true causes of the Great Depression were the Smoot-Hawley tariff, the fall in US money supply caused by the banking collapses of 1930-33 and president Herbert Hoover's utterly foolish tax increases of 1932 ... In that case, as recently, money supply had been allowed to race ahead of itself in 1971-73 while banking deregulation had caused the appearance of innumerable fringe banks, all attempting to make money by lending to commercial and residential... (Asia Times Online)
Eric Singer: Pay Czar Driving Talent Away Nov 4, 2009
While the Fed has doubled the money supply, all the inhibitions on bankers have helped to slow the velocity of money to a crawl. So the conflicting forces creating inflation and deflation rise in intensity, increasing the chances of a volatile outcome. (Newsmax)
Indian market worth the premium: CLSA Nov 3, 2009
We saw that in Japan, we have seen that in the US in the past year, but you dont see broad money supply or credit aggregates expanding. So, in the US today, you have a big pickup in the monetary base, but bank lending is declining on an annualised basis. (India Times)
Cole Skinner: The Fed should be audited Nov 3, 2009
This bill would require no examination of the Fed's inflation of the money supply, no disclosure of deals with foreign central banks, and would only require release of the names of recipients of taxpayer dollars one year after a program has ended. Thus, as long as a program is "active," even in the most trivial sense, the Fed would not be required to release the names. (Athens Banner-Herald)
Markets watch European Central Bank for exit plan Nov 3, 2009
The aim of the policy is to increase the money supply in the hope that eventually the banks will start lending more to the private sector. Most analysts think it will increase its asset purchase program by at least 25 billion pounds. (The Star Online, Malaysia -- Business)
Analysis of recent market correction Nov 1, 2009
The money supply instead of flowing into productive use has gone into asset markets on the verge of creating asset bubbles ... Reducing the money supply would mean stopping the stimulus that the economies are banking on for recovery. (India Times)
Know what is monetary policy. Nov 1, 2009
Monetary policy is a tool used by the central bank to manage money supply in the economy in order to achieve a desirable growth. The central bank controls the money supply by increasing and decreasing the cost of money, the rate of interest ... Under an expansionary policy, policy makers increase the money supply in the system by lowering interest rates. (India Times)
Inflation by stealth Oct 30, 2009
Inflation is classically described simply as an increase in the money supply ... The explanation can be found in the difference between monetary base and money supply ... Fractional reserve banking will transform a $1 trillion monetary base injection into a $9 trillion increase in money supply. (Asia Times Online)
What next for US economy? Oct 30, 2009
The money supply has been flat this year for both M1 and M2, suggesting that the decline in the dollar today results from monetary stimulus in 2008, but that ended almost a year ago. Since early 2009, the money supply has grown by only 1% to 2%, which will put a bottom on how far the dollar can fall. (BBC News -- Business)
The One Thing Oct 29, 2009
We added 13 percent more money to our money supply for two years ... So we had to have a 20 percent interest rate for a 13 percent increase in the money supply for two years ... In the last year or so since Lehman Brothers failed, we have increased our money supply by 120 percent. (Fox News)
Credit burns consumers Oct 29, 2009
The rate of growth of South Africa's broad M3 money supply measure rose by 4 ... South Africa's broad M3 money supply aggregate growth rate, meanwhile, was expected to have increased in September at 4. (iAfrica.com)
Eurozone lending contracts for the first time: ECB Oct 28, 2009
Growth of the ECB's wider M3 money supply indicator, which measures cash, deposits and various other financial items, fell meanwhile to 1 ... Lending and money supply data illustrate consumer demand and overall activity in an economy. (Yahoo! Asia News)
Abolishing risk destroys wealth Oct 28, 2009
As we are in a world where central banks set interest rates and control money supply, I do think they should be vigilant that excessive money supply does not push up all asset classes without a comparable pickup in real economic activity - the clearest bubble indicator, in our view. If risk is good, what is bad. (Asia Times Online)
Soros: A new economic system is required Oct 28, 2009
Soros argues it is not enough to control the money supply, the availability of credit must also be monitored. Not just monetary controls but credit controls must be applied such as margin requirements and minimum capital requirements which need to be varied in order to control asset bubbles. (Xinhuanet, China)
RBI raises SLR by 100 bps to 25% Oct 28, 2009
Keeping this in mind only, he said, the money supply target has been reduced by one percentage point to 17. However, he was quick to add that exit of the easy money policy will be calibrated in such a fashion to ensure recovery process is not hampered. (India Times, India -- Intl Business)
* Monetary supply posts strong growth Oct 27, 2009
The nations money supply continued to post strong growth year-on-year last month as more funds flowed from time and savings deposits to passbook accounts, the central bank said yesterday. The narrow monetary aggregate of M1B, which refers to currency held by the public and demand deposits, rose 23. (Taipei Times, Taiwan -- World)
UK policy maker dismisses risk of high inflation Oct 27, 2009
Adam Posen said in a speech in London that the unprecedented injection into the money supply would help put the British economy on the road to recovery - although it could be a rocky and unpredictable ride. The quantitative easing program lets the central bank buy assets from banks to flush the system with cash, to a current limit of 175 billion pounds ($290 billion). (The Star Online, Malaysia -- Business)
Barrage of earnings, economic data to drive market Oct 26, 2009
The Conference Board forecasts economic activity by measuring current jobless aid claims, stock prices, consumer expectations, building permits for private homes, the money supply and other data. Stock futures steady, earnings draw attention. (Fresno Bee -- Business)
RBI likely to retain policy rates Oct 25, 2009
To help the economy get adequate flow of funds to weather the impact of the financial crisis, RBI has eased money supply since the middle of last September following the collapse of the US financial services icon Lehman Brothers. Read business stories in. (India Times)
Banks see growth in loan lending Oct 24, 2009
According to the updated money supply figures, the total stock of money comprising cash currency and deposits with the banks amounted to Rs 51,46,157 crore as on October 2009, up Rs 50,345 crore (1 ... The annual money supply growth now stands at 18. (India Times)
British economy still stuck in recession Oct 24, 2009
5% since March, an unprecedented 175 billion pound ($290 billion) injection into the money supply and billions more through fiscal measures ... 6339 as markets factored in the likelihood that the central bank will have to increase the so-called quantitative easing program buying assets from banks to boost the money supply when it meets next month. (USA Today -- Money)
Britain economy remains in recession Oct 23, 2009
LONDON - Britain is likely to experience a slow and painful recovery from recession despite growing optimism, a leading forecaster said, as the pound fell on speculation the Bank of England may extend its money supply program to boost lending. The Ernst Item Club predicted some growth in the second half of 2009 but said that the domestic economy would struggle to achieve 1 percent growth in 2010. (Fresno Bee -- Business)
Top banker's warning Oct 22, 2009
The M2 measure of money supply is up 29. 3 per cent, year on year. (CNN -- International)
Gloating with WallStreet's goodfellas Oct 22, 2009
In the past 13 weeks, the money supply has fallen 0 ... Conversely, the money supply is reduced when debts are paid off or written off. (Asia Times Online)
Bank of England warns economic recovery path not smooth Oct 21, 2009
Improvements in financial markets should in time ease lending conditions to households and businesses, he added, in comments that will be closely scrutinized by economists for clues about the central bank's intentions for its asset purchasing program to boost the money supply. "These developments are encouraging," King told business leaders at a dinner in Edinburgh, Scotland. (The Star Online, Malaysia -- Business)
Jaideep Mishra: Monetary policy Oct 21, 2009
Decades ago, the monetarist position argued that the level of nominal money supply is accountable for inflation. Since then, the monetarist assumption that policymakers necessarily need to forego growth to maintain a certain level of prices has been discredited, thanks to globalisation and more complete markets. (India Times)
Leading index points to economic recovery Oct 21, 2009
" Three of the four components that make the index were higher in August - share prices, real money supply and US industrial production while dwelling approvals fell by 0.1 per cent. Mr Evans said the Reserve Bank of Australia (RBA) would lift the cash rate when its board meeting meets on November 3, but the debate would be by 25 or 50 basis points. The RBA lifted the overnight cash rate by 25 basis points to 3.25 per cent on October 6, its first tightening of monetary policy since March 2008.... (Sydney Morning Herald -- Business)
Canada Leading Indicators Rise 1.1% in September on Housing Index, Stocks Oct 21, 2009
The leading index compiles from the money supply to the average length of the factory workweek to paint a picture of the economy in the months ahead. Seven of the 10 components of the leading indicator advanced during the month, including a 4 percent rise of the countrys benchmark stock index. (Bloomberg -- Canada)
Leading Economic Index Rises 1.1% as Australia Stocks, Cash Supply Gained Oct 21, 2009
Oct. 21 (Bloomberg) -- An Australian index of leading economic indicators rose in August as shares and money supply climbed. The index, a gauge of future economic growth, gained 1. (Bloomberg -- Australia & New Zealand)
The right (and political) reasons for mini-stimulus Oct 20, 2009
In other words as the money supply increases things cost more ... 2) The government controls the money supply to a certain extent through tightening or loosening credit. (Atlanta Journal-Constitution -- Opinion)
Financial system yet to recover: UK official Oct 19, 2009
Posen said the central bank would base its decision on whether to extend QE, a tool used to increase the money supply by buying government or other securities from the market, on inflation and the extent of the economic recovery. "It goes back to how much you think there is real overshooting and inflation risk, and how much you think the financial system has recovered," he was quoted as saying. (Xinhuanet, China)
Gold bulls ready to resume charge Oct 19, 2009
The worlds money supply has increased and gold hasnt kept pace, he said. Were now in a period where gold is catching up. (Sydney Morning Herald -- Business)
Mythili Bhusnurmath: Waltzing Matilda Oct 19, 2009
Yes, exports continue to lag but the steady inflow of foreign exchange (with its fallout on money supply in a regime where the government cannot afford to allow the rupee to appreciate beyond a point) is bound to have a spillover on prices. The signs are already there: both the wholesale price index and, more worryingly, consumer price indices are surely but steadily inching up even as crude oil prices look menacing. (India Times)
Mexico Keeps Key Rate at 4.5% for Third Month on Sign Recovery to Be Slow Oct 17, 2009
Previously, the bank implemented monetary policy by targeting the money supply through a system known as the corto. . (Bloomberg -- Latin America)
Ortiz May Keep Interest Rate at 4.5%, Signal Review of Inflation Forecasts Oct 16, 2009
Previously, Banco de Mexico implemented monetary policy by targeting the money supply through a system known as the corto. . (Bloomberg -- Latin America)
Edelweiss & ET NOW to unveil lead index to track economy Oct 16, 2009
Redundancies were also removed for sets of indicators demonstrating auto-correlation (for example, money supply and non-food credit off-take). On the basis of such criteria, the final set of variables that was chosen for inclusion in the index are as follows: (1) credit off-take, (2) policy interest rates, (3) slope of the yield curve, (4) non-oil imports, (5) commercial vehicle production, (6) cement dispatch, (7) domestic steel prices, (8) government expenditure, and (9) resource mobilisation... (India Times)
Mkt to give rousing welcome to Samvat 2066 Oct 16, 2009
Central Banks world-wide, including India, have started signalling the possibility of tightening of monetary policy early next year on fears that excess money supply may spark rapid price jumps of commodities and goods. Brokers said the hike in rates could result in some foreign investors liquidating their equity portfolios in emerging markets, including India, that have been created by borrowing at near-zero interest rates in the US. A hike in interest rates in the US would result in dollar... (India Times)
Back with the Bank Oct 16, 2009
Congress already has the power to coin money but I don t think even Ron Paul wants to have politicians controlling the money supply. This is not Argentina. (The American Conservative)
Asian Stocks Advance on Earnings Speculation; Treasuries, Dollar Decline Oct 15, 2009
3 percent as new lending expanding last month and the central bank said money supply grew at a record in September. Bank of Communications Ltd. added 1. (Bloomberg -- Asia)
The gold standard at more than $1,000 Oct 14, 2009
In fact, if anything, based on their relationship to the money supply, gold and silver have a long way to go before that happens. " A number of factors have influenced the meteoric rise in the price of gold. With the United States just starting to come out of recession and world economies still recovering from the global credit crunch, many investors are concerned the enormous volume of money that governments around the world created to prop up their ailing economies could lead to inflation.... (Pittsburgh Post-Gazette, PA)
Pound hit by falling UK inflation Oct 14, 2009
The inflation data showed that the Bank of England pumping of about 160bn into the the economy's money supply - so-called quantitative easing - had not yet taken effect, said James Hughes, chief economist at Black Swan Capital Wealth. But he added that the huge budget deficit, welfare system commitments and "uncompetitive" exchange rate meant the supply of money had not yet fed through to prices. (BBC News -- Business)
CAPS Roundtable: Inflation, Deflation, and Your Portfolio Oct 14, 2009
UltraLong: My favorite indicator of inflation is probably the most widely followed: the M2 money supply. M2 money supply measures, among other things, the amount of currency in circulation ... Since 1960 we have seen M2 money supply spike over 10% growth five times, and in three of those periods inflation spiked up to double-digits. (MSNBC -- Business)
Re-stimulating Oct 13, 2009
Then, double-digit unemployment resulted from the Federal Reserve's tightening of the money supply to crush inflation; even at their high point in 1983, Reagan administration budget deficits reached only 6 percent of GDP. In other words, fiscal and monetary authorities had plenty of room to maneuver. Today, however, the dollar's recent plunge portends the higher interest rates or inflation that could result from a rampant Fed printing press and federal borrowing. (Juneau Empire)
FMPs promise more bang for buck Oct 13, 2009
Among other issues, the redemption freeze by select mutual funds, following the money supply squeeze in October, also left a bad taste among investors. Market regulator Sebi hit the final nail on the coffin this January, barring FMPs from indicating returns in advance. (India Times)
Indian industrial production jumps 10.4% Oct 13, 2009
Dash believes policymakers will be leery of stifling the "green shoots" now taking root in India's economy by tightening money supply too quickly. "To encourage credit growth to happen, RBI (the Reserve Bank of India) is not going to take any action before the end of this financial year in March 2010," he said. (Sydney Morning Herald -- Business)
Rand manipulation is deficient way to boost competitiveness Oct 13, 2009
Ironically, at the time that the Reserve Bank was intervening heavily to build up reserves a few years ago, I suggested this was boosting money supply growth as the bank was creating rands to sell into the market in exchange for forex, with inflationary implications ... It now appears the bank is refraining from intervention because it recognises that such moves help boost money supply ... But surely, with money supply hardly growing, now is the time to intervene without fearing the boost to... (Business Report, South Africa)
European banks leave interest rates unchanged Oct 10, 2009
5%, the Bank of England also held off from any further moves to expand the money supply for now ... The aim of the policy is to increase the money supply in the hope that eventually the banks will start lending more to the private sector. (USA Today -- Money)
