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U.K. M4 Money Supply Unexpectedly Drops In December
Comments
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where's it going?
A Big Black Hole marked Deflation :eek:'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
inspector_monkfish wrote: »The disappointing number is bad news for hawks desperate MSE housing bears calling for a Spring/Summer Bank Rate hike. .
Fixed that for you.:D“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
Strip out the QE which amounts to about 8.5-9% , and M4 is contracting on an annual basis. :eek:
It is a similar story in the U.S (M2). and Euro La La Land (M3)
Money Supply is contracting.
Not only will Interest Rates not be increasing anytime soon, I wouldn't be expecting much GDP growth either for a good few quarters.
My thought is that velocity of circulation is collapsing rather than the stock of money.
I heard an interview with some big cheese from RBS the other day. He claimed that their problem wasn't that they didn't have the money to lend now, it's that companies don't want to borrow.
Now that's a problem that can't be fixed with QE. The only way to solve that problem is literally to print tenners.0 -
It's bad news for the bulls, not the bears
No it's bad news for everyone :eek:'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
No it's bad news for everyone :eek:
I wouldn't take too much out of it. We didn't have QE in november or december, AFAIK, every month in the last year where there is no QE there have been disappointing results in terms of money supply. December was the first month for a long time where there had been two months without QE. So we had very disappointing money supply data.
They need to start printing. Otherwise, we will have a recession in 6 months time.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
For how long ??
Until money supply can sustain 1% a month growth without printing. I have no idea when that will be. Neither does the bank of england, but I suspect it will only happen when the delevaraging in the household sector ends... and, when the deleveraging in the government (which hasn't even started yet) ends...
Probably three years to five years time.“The ideas of debtor and creditor as to what constitutes a good time never coincide.”
― P.G. Wodehouse, Love Among the Chickens0 -
I wouldn't take too much out of it. We didn't have QE in november or december, AFAIK, every month in the last year where there is no QE there have been disappointing results in terms of money supply. December was the first month for a long time where there had been two months without QE. So we had very disappointing money supply data.
They need to start printing. Otherwise, we will have a recession in 6 months time.Until money supply can sustain 1% a month growth without printing. I have no idea when that will be. Neither does the bank of england, but I suspect it will only happen when the delevaraging in the household sector ends... and, when the deleveraging in the government (which hasn't even started yet) ends...
Probably three years to five years time.
MSE forum member puts forward a reasoned arguement for the possibility of a double dip shocker.
Kudos to purch too. He succinctly points out that none of this is good news. For anyone.It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: »Kudos to purch too. He succinctly points out that none of this is good news. For anyone.
TBH it may not be good for me long term but short to medium it is.
So I agree with purch to a point but I would be a liar to say I have not been and still will be benefiting from the low IR rates it has caused.0
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