M4 Money Supply Dropped 1.3% Last Month

[Nationalist]

So money supply down 1.3%, growth was expected.

Mortgage approvals are down 5K on the month, were expected to be up.

Net lending to individuals has gone by £100m on the month.

All this supports last week's GDP figure (down 0.5%)

Only positive indicator is PMI (600 purchasing managers think things are looking up!)

[Pent Up]

Mervs vigilance is paying off..

[mattyfc]

Sounds like good news to me. Does anyone really want house prices to rise, more reckless mortgage lending and loose credit conditions leading to another banking crisis. Another decade of debt please?

Falling house prices, less mortgage lending, less consumption, less debt and growing manufacturing is exactly what is required.

Better to be in recession than have “growth” funded by credit that we all know we eventually default leading to an even worse recession in the future.

This obsession with consumption and debt led by Brown are what caused the crisis. Reversing this is clearly very positive.

[shermanator]

Sounds like good news to me. Does anyone really want house prices to rise, more reckless mortgage lending and loose credit conditions leading to another banking crisis. Another decade of debt please?

Falling house prices, less mortgage lending, less consumption, less debt and growing manufacturing is exactly what is required.

Better to be in recession than have “growth” funded by credit that we all know we eventually default leading to an even worse recession in the future.

This obsession with consumption and debt led by Brown are what caused the crisis. Reversing this is clearly very positive.

Agreed. Sadly another debt binge and money shuffling is the only game in town, especially after the UK threw all its eggs into the service 'miracle' economy basket. Germany and France by way of contrast are doing quite well.

How interesting to see broad money contracting even with record low IRs and QE. The banks aren't lending as they're insolvent and its wage freezes all the way down (if you keep your job at all).

[General Congreve]

Good stuff. Bring on the inevitable economic crash, house price crash, increasing burden of government debt and bank due to lower tax take, negative growth, falling earnings and consequently more QE and ZIRP (stealth default) and the eventual collapse of the pound. Nice.

Edited February 1, 2011 by General Congreve

[Sour Mash]

So money supply down 1.3%, growth was expected.

Mortgage approvals are down 5K on the month, were expected to be up.

Net lending to individuals has gone by £100m on the month.

All this supports last week's GDP figure (down 0.5%)

Only positive indicator is PMI (600 purchasing managers think things are looking up!)

I think this is the first actual fall in money supply. Interesting .... more QE now all but inevitable along with ZIRP, cost of living inflation is going to rip.

[Papa Serf]

Our obsession with growth must stop. I view it like a bodybuilder, big and bulky but stuffed with steroids, not as strong as they look, very little endurance and do it for too long end up crippled with a bad back.

[Fishbone Glover]

Our obsession with growth must stop. I view it like a bodybuilder, big and bulky but stuffed with steroids, not as strong as they look, very little endurance and do it for too long end up crippled with a bad back.

Exactly. Part of the problem we currently face is that the whole system we operate is dependant on growth, unfortunately continual, exponential, growth just isn't possible on a finite planet.

We need to find a stable system and maintain it in equibrium, then we really will have conquered boom and bust. Sadly, I don't think it's possible.

[AteMoose]

Our obsession with growth must stop. I view it like a bodybuilder, big and bulky but stuffed with steroids, not as strong as they look, very little endurance and do it for too long end up crippled with a bad back.

Economic Growth == Population Growth, when a population grows the economy follows because there are more people earning.. a Better analogy would be a couple only having one kid and not needing as much money, the downside of no growth is when the couple retire they are poor because one person is doing the work of two. We have economic growth in countries with the fastest rising populations, country's will stalling economies have diminishing populations.

Im not saying its good, but it is nothing like a body builder, you can have a rising population/growth they people aren't all on steroids they are just more people. Population growth is unsustainable but our entire economic system is based on populations growing and the next generation paying for the previous generation. Its unsustainable but for totally different reasons (population has its limits)

Edited February 1, 2011 by AteMoose

[Papa Serf]

Economic Growth == Population Growth, when a population grows the economy follows because there are more people earning.. a Better analogy would be a couple only having one kid and not needing as much money, the downside of no growth is when the couple retire they are poor because one person is doing the work of two. We have economic growth in countries with the fastest rising populations, country's will stalling economies have diminishing populations.

Im not saying its good, but it is nothing like a body builder, you can have a rising population/growth they people aren't all on steroids they are just more people. Population growth is unsustainable but our entire economic system is based on populations growing and the next generation paying for the previous generation. Its unsustainable but for totally different reasons (population has its limits)

This is the selling point for immigration, yet another ponzi.

[Executive Sadman]

Our obsession with growth must stop. I view it like a bodybuilder, big and bulky but stuffed with steroids, not as strong as they look, very little endurance and do it for too long end up crippled with a bad back.

My view, as with everything, is its good in moderation.

An economy starved of cash is the starving ethiopian, an economy awash with cash is the mobidly obese american. Neither are healthy, both will die soon. A happy median is the place to be, lets say the neither fat nor malnourished Brad Pitt. Its all about balance. A balanced trade situation, a balanced budget.

[exiges]

This is the selling point for immigration, yet another ponzi.

+1

To be fair though, who is going to pay for all those boomers + public sector workers claiming pensions that were designed to run for 3yrs over 30 years ?

It's lucky that the many new immigrant workers are going into highly paid jobs and they're declaring their income, rather than claiming benefits themselves.

[Pent Up]

Our obsession with growth must stop. I view it like a bodybuilder, big and bulky but stuffed with steroids, not as strong as they look, very little endurance and do it for too long end up crippled with a bad back.

Not to mention man boobs and shrivelled testicles...

[MinceBalls]

Isn't M4 (the money created from credit expansion and what we buy houses with) always likely to come down with ZIRP policy? People are paying off their mortgages.

[nowthenagain]

Exactly. Part of the problem we currently face is that the whole system we operate is dependant on growth, unfortunately continual, exponential, growth just isn't possible on a finite planet.

We need to find a stable system and maintain it in equibrium, then we really will have conquered boom and bust. Sadly, I don't think it's possible.

It is human nature to always grow. It is the way every living thing works. We can't 'reach equilibrium' or stabilise, it is impossible.

Every living thing grows until it is so big that it eats itself.

Edited February 1, 2011 by nowthenagain

[Nationalist]

+1

To be fair though, who is going to pay for all those boomers + public sector workers claiming pensions that were designed to run for 3yrs over 30 years ?

It's lucky that the many new immigrant workers are going into highly paid jobs and they're declaring their income, rather than claiming benefits themselves.

:hollow laugh: the proportion of immigrants making a positive contribution to the exchequer is minute. All it takes is one baby and you're a parasite for the next 20 years - free medical, free education, child benefits, tax credits, etc.

[Papa Serf]

It is human nature to always grow. It is the way every living thing works. We can't 'reach equilibrium' or stabilise, it is impossible.

Every living thing grows until it is so big that it eats itself.

Is it to grow or improve? With me its always improve.

[FreeTrader]

The measure of M4 that the BoE focuses on is "M4 excluding intermediate OFCs".

In Q4 the quarterly annualised growth of this measure rose from 2.3% to 3.0%, and the annual growth rate rose from 1.9% to 2.3%.

http://www.bankofengland.co.uk/statistics/fm4/2010/dec/FM4.pdf

[gingertips]

Economic Growth == Population Growth, when a population grows the economy follows because there are more people earning.. a Better analogy would be a couple only having one kid and not needing as much money, the downside of no growth is when the couple retire they are poor because one person is doing the work of two. We have economic growth in countries with the fastest rising populations, country's will stalling economies have diminishing populations.

Im not saying its good, but it is nothing like a body builder, you can have a rising population/growth they people aren't all on steroids they are just more people. Population growth is unsustainable but our entire economic system is based on populations growing and the next generation paying for the previous generation. Its unsustainable but for totally different reasons (population has its limits)

yeah there wouldnt be enough housing in the UK for starters...

[Fishbone Glover]

It is human nature to always grow. It is the way every living thing works. We can't 'reach equilibrium' or stabilise, it is impossible.

Every living thing grows until it is so big that it eats itself.

I can see where you're coming from, but I would hope that a species that has managed to shape it's own environment in a way that no other species ever has would be a little cleverer than that.

Does growth have to mean growth in numbers? Or could it be improvement. Is it only the system that dictates that perpetual growth is necessary? Why can't we devise another system? There's nothing stopping us. The biggest problem is getting people to think outside the boundaries, outside the confines of the system. You see the same thing with people and computers, if the 'system' says it's right, it is. Even if it isn't.

[Drac]

The measure of M4 that the BoE focuses on is "M4 excluding intermediate OFCs".

In Q4 the quarterly annualised growth of this measure rose from 2.3% to 3.0%, and the annual growth rate rose from 1.9% to 2.3%.

http://www.bankofengland.co.uk/statistics/fm4/2010/dec/FM4.pdf

So with M4 starting to move northwards, albeit in small increments but positive, we will see the base rate move north..........

If M4 is now trending upwards, i expect to see a couple of .25% moves up this year? When M4 was 13%, the base rate was 5.5%, with M4 at 3% i would expect a base rate of around 1.25%?

[scepticus]

We need to find a stable system and maintain it in equibrium, then we really will have conquered boom and bust. Sadly, I don't think it's possible.

Of course it is possible. An equilibrium situation is in fact the most likely outcome, once the various arbitrages, worldwide iniquities and faux scarcity situations and unsustainable dictatorships have been cut away by reality.

And the greatest of all these is the pretence that it is possible to have a fiat money that is scarce.

The cycle of boom and bust originates in the human delusion of money scarcity in an age in which such a situation makes no social or economic sense. Other things can be scarce, but not money numbers in a machine.

Edited February 1, 2011 by scepticus