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Oliver Sutton

M4 Lending Goes Yoy Negative

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Looks like the last lot didn't work.

Of course it won't stop them trying again.

It wasn't enough !!! Use the big lever.

M4 Lending isn't M4 Holdings.

One can go up and the other down.

Edited by Alan B'Stard MP

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I read it as a mixture of things.. one being that we haven't plugged the hole left when markets stopped providing us with cheap money.

I believe It is also a reflection of a lack of demand (fear of borrowing) and shows that industry is not creating enough demand to off set the lack of lending to the housing market.

This should be a good thing for HPC, less lending equals lower prices. However, I'm pretty sure that M4 is also one of the BoE's main indicators.. i suspect that they will do everything in their power to keep M4 positive, and if industry can't do it alone.. then it'll be more printy printy to keep lending rates as low as possible.

More punch anyone?

Edited by libspero

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i suspect that they will do everything in their power to keep M4 positive, and if industry can't do it alone.. then it'll be more printy printy to keep lending rates as low as possible.

But whatever they did before doesn't look like it made any difference - the graph just goes steadily downward.

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forgive my ignorance but isn't the former a derivative of the latter?

But a bank doesn't HAVE to lend. Even if lending is derrived from holdings it does't mean there is a direct relationship (ie: just because holdings increase doesn't mean banks lend more)

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But whatever they did before doesn't look like it made any difference - the graph just goes steadily downward.

The graph just doesn't go back far enough.. you really need one going back to pre-crunch levels to get the full picture.

It went negative during the credit crunch, then we went "back to happy".. now it's negative again..

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forgive my ignorance but isn't the former a derivative of the latter?

Not a direct correlation.

No one is borrowing - but the central bank (or any bank) is buying assets from the non-bank sector.

One measurement goes down - the other up.

The credit base moves ever closer nominally to the monetary base.

Edited by Alan B'Stard MP

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being an avid reader of steve keens blog,I was well aware that assuming money mulitpliers are the same in boom times as credit recessions is plainly not sensible.

for a moment I forgot where I was.

agree on ben.

I prefer to call it the money stupifier.

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Not a direct correlation.

No one is borrowing - but the central bank (or any bank) is buying assets from the non-bank sector.

One measurement goes down - the other up.

The credit base moves ever closer nominally to the monetary base.

Alan.. could you educate a young fool?

I always imagined M4 as total money (credit) in existence.

I always imagined M4 lending as the increase/decrease in this amount (assuming if not equal to the change then at least proportional to it).

I know you are correct as the table on the BoE's most recent release HERE shows an example of M4 rising with M4 lending dropping.

Unfortunately unlike PftF I didn't fully understand your explanation.. Are you just saying that M4 is being distorted by other factors... eg the BoE expanding the money supply by buying up assets with printed money that hasn't been borrowed into existence?

Could you elaborate in terms a 5 year old would comprehend?

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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