Tuesday, May 18, 2010

Charting M4 under Glorious Coalition

I thought it might prove instructional if I can remember to chart the monthly M4 growth of the money created by the Bank of England. From being almost 18% last year, when I thought it would tip over 20% due to quantitative easing, they are now only increasing the money supply by 3.5% annually, which for them is quite a breathtaking restriction. (Like James Bond only having half a Martini a day.)

Let's see how it goes under the Glorious Coalition. (My guess is UP.)


Anonymous said...

I had understood that M4 rose last year to 18 percent as a result of corporates leaving large deposits with the banks.

This year the Banks have large deposits with the Bank of England as a consequence of the Bank of Englands counterfeiting exercise.

Might this have something to do with the reduced M4 figure?

Likewise the banks have not been lending much and so the frenzy of fiat money created through the fractional reserve mechanism might have something to do with it.

Given their record of destruction over the past eighty or so years and their devotion to Keynes idea of inflating away problems I doubt whether you can lay this phenomena at the feet of a prudent government.

And my hat off to you, as you forcast the government did win the electon, again

Jack Maturin said...

That money's going to come out of there, at some point. And when it does; Wham. We really will be off to the races.

And yes, I got a prediction right. The British government DID get back in again. As it has, for several hundred years now.

I think I deserve a large gin and tonic. Cheers! ;-)