Presentation is loading. Please wait.

Presentation is loading. Please wait.

The Money Supply and Inflation By Daryl Montgomery May 14, 2008 Copyright 2008, All Rights Reserved.

Similar presentations


Presentation on theme: "The Money Supply and Inflation By Daryl Montgomery May 14, 2008 Copyright 2008, All Rights Reserved."— Presentation transcript:

1 The Money Supply and Inflation By Daryl Montgomery May 14, 2008 Copyright 2008, All Rights Reserved

2 Global Inflation Rice goes up 50% in a two-week period in Asia, 120% in one year, wheat 65%. Global food prices up 57% YoY. Food prices up 21% in Q in China. Food prices up 6% in March in Eurozone. Oil up 105% YoY. U.S. gas prices up 21% YoY. Imported goods prices in U.S. up 14% YoY.

3 Money Supply Growth/Inflation MZM (forms of cash) – Up 38% annual rate in Q1 M3 (broadest measure) – Up 18% annual rate Q1 Many top economists and top blogsters claim these numbers do not indicate inflation! In the U.S. in the 1970s: 1. M3 growth peaked at 16% in 1971(now 20%) 2. PPI peaked at 36% YoY in CPI was up 11% YoY in U.S. CPI later peaked at 14% YoY in Using the same methods to calculate CPI as were used in the 1970s, CPI is now 12%. (not 4% as the U.S. government claims).

4 M3 Money Supply – Rate of Change 2004 to 2008

5 Long-Term M3 Money Growth

6 Money Supply and Inflation Link 10-Year Moving Average of Rate of Change

7 CPI - Calculated as it was in the 1970s Compared to Official Figures

8 GDP Adjusted for More Accurate CPI

9 Summary of New Fed Programs Feds TAF (term-auction facility) 1. Cash in exchange for bonds. 2. Started at $40 billion per month in December. 3. Raised to $60 billion per month January. 4. Raised to $100 billion per month in March. 5. Raised to $150 billion per month in May. Feds TSLF (Term Securities Lending Facility) 1. Treasuries swapped for non-tradeable mortgage bonds (MBSs) 2. Started in March with goal of up to $200 billion. PDCF (Primary Dealer Credit Facility) 1. Overnight funding for non-banks, almost any bond with a market price is accepted as collateral. 2. Started in March, funding unlimited.


Download ppt "The Money Supply and Inflation By Daryl Montgomery May 14, 2008 Copyright 2008, All Rights Reserved."

Similar presentations


Ads by Google