Archive for the ‘Money Supply’ Category

“SGS M3 Continuation” – John Williams

2009, February 18

John Williams, Shadow Government Statistics:

http://www.shadowstats.com/alternate_data

SGS M3 Continuation: shadowstats.com

SGS M3 Continuation: shadowstats.com

SGS Consumer Price Index continuation: shadowstats.com

SGS Consumer Price Index continuation: shadowstats.com

SGS GDP continuation: shadowstats.com

SGS GDP continuation: shadowstats.com

SGS alternate employment data

SGS alternate employment data

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“M Prime” (M’) – Mike “Mish” Shedlock

2009, February 18

TMS: A Truer Money Supply?

http://globaleconomicanalysis.blogspot.com/2008/07/tms-truer-money-supply.html

M Prime

Using Shostak’s definition and with much charting help from Bart at Now and Futures, I came up with M Prime (M’), arguably what TMS is supposed to be. For more details on the origin of M’, please see Money Supply and Recessions.

M Prime 1968 To Present

M' (M Prime) 1968-2008, with percentage changes

M' (M Prime) 1968-2008, with percentage changes

M’ dips below 2.5% or so are a strong signal of recession.

M Prime vs. TMS

As for measuring inflation or deflation, I do not think any of them will suffice for the simple reason that credit marked to market is plunging and that is the way things need to be looked at. Unfortunately, there is no accurate measure of the plunge in credit because financial institutions are not marking credit to market. Instead much credit is still in SIVs and/or hidden in Level 3 (marked to fantasy) assets.

… That is on top of the distortion I mentioned earlier in that M3 and MZM are expanding because credit lines are being tapped and parked in money market funds.

Judging from collapsing real estate, people walking away from homes, risk aversion sinking in, and banks unwillingness to lend, together with the idea that credit that should be marked to market isn’t, I believe we are in deflation, right here right now. Those focused on M3 or energy and food prices are truly missing the boat. Trillions of dollars of destruction in housing wealth (with much more coming) and another trillion markdown in bank credit coming (on top of what we have already seen) are far more important and far more representative of the state of affairs than is M3, or any other monetary aggregate for that matter.

M' (M Prime) versus TMS, 1968-2008

M' (M Prime) versus TMS, 1968-2008

Is Big Inflation Coming?

…a perfect 15 out of 15 conditions experienced in the great depression are happening today as discussed in Humpty Dumpty On Inflation.

Of course Humpty Dumpty can and does pretend that deflation is specifically about money supply, totally ignoring credit. And those same Humpty Dumpties were amazed by the collapse in commodities and were crushed shorting treasuries because they did not see this coming.

“Actual Money Supply” – Paul Van Eeden

2009, February 18

http://www.paulvaneeden.com/Actual.Money.Supply

PaulVanEeden.com: "Actual Money Supply"
PaulVanEeden.com: “Actual Money Supply”

PaulVanEeden.com: AMS comparison

PaulVanEeden.com: AMS comparison


PaulVanEeden.com: AMS historical

PaulVanEeden.com: AMS historical

“True Money Supply” – Rothbard

2009, February 18

Ludwig von Mises Institute · 518 West Magnolia Avenue · Auburn, Alabama

http://mises.org/content/nofed/chart.aspx?series=TMS 

Series: True Money Supply, MZM Money Stock, M1 Money Stock, M2 Money Stock, M3 Money Stock

" True Money Supply" 09-02-17

" True Money Supply" 09-02-17

The True Money Supply (TMS) was formulated by Murray Rothbard and represents the amount of money in the economy that is available for immediate use in exchange. It has been referred to in the past as the Austrian Money Supply, the Rothbard Money Supply and the True Money Supply. The benefits of TMS over conventional measures calculated by the Federal Reserve are that it counts only immediately available money for exchange and does not double count. MMMF shares are excluded from TMS precisely because they represent equity shares in a portfolio of highly liquid, short-term investments which must be sold in exchange for money before such shares can be redeemed. For a detailed description and explanation of the TMS aggregate, see Salerno (1987) and Shostak (2000). The TMS consists of the following: Currency Component of M1, Total Checkable Deposits, Savings Deposits, U.S. Government Demand Deposits and Note Balances, Demand Deposits Due to Foreign Commercial Banks, and Demand Deposits Due to Foreign Official Institutions.