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M4 Money Supply

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http://www.bankofengland.co.uk/statistics/fm4/current/index.htm

M4 excluding intermediate OFCs fell by £7.0 billion in February, compared to an average monthly increase of £3.3 billion in the previous two quarters. The three-month annualised growth rate was 0.5% (3.2% in January). M4 lending excluding intermediate OFCs increased by £7.3 billion in February; compared to an average monthly decrease of £0.8 billion in the previous two quarters. The three-month annualised growth rate increased to 2.0%.

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http://www.bankofengland.co.uk/statistics/fm4/current/index.htm

M4 excluding intermediate OFCs fell by £7.0 billion in February, compared to an average monthly increase of £3.3 billion in the previous two quarters. The three-month annualised growth rate was 0.5% (3.2% in January). M4 lending excluding intermediate OFCs increased by £7.3 billion in February; compared to an average monthly decrease of £0.8 billion in the previous two quarters. The three-month annualised growth rate increased to 2.0%.

Ah, so we're printing money so the banks can bid the price of everything out of our reach.

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http://www.bankofengland.co.uk/statistics/fm4/current/index.htm

M4 excluding intermediate OFCs fell by £7.0 billion in February, compared to an average monthly increase of £3.3 billion in the previous two quarters.

Yet including intermediate OFCs it's completely different.

Doesn't that mean half our economy is an Enron-style scheme of unproductive special investment/debt vehicles whose only purpose is to fudge the rules and print more money (again)?

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So we have price inflation but money supply deflation....?

Also, we have a surprise rise in net lending to individuals (£2bn last month rather than the £1.2bn expected by Forex.) Normally this wold be positive news, people having the confidence to borrow more. But I wonder if it isn't actually desperation - effectively people borrowing to eat.

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So we have price inflation but money supply deflation....?

Also, we have a surprise rise in net lending to individuals (£2bn last month rather than the £1.2bn expected by Forex.) Normally this wold be positive news, people having the confidence to borrow more. But I wonder if it isn't actually desperation - effectively people borrowing to eat.

Well this can happen.

It is perfectly possible to have an expanding money supply, and price deflation.

Say if you print some money, and give it out as a tax cut. People might choose to spend that money on say cars. The motor manufacturer, seeing the increased demand, might invest a load of money in new plant, and so do the competitors, which allows cars to be produced at much lower cost. Competition then causes the prices of these cars to fall from their original price.

So more money only causes prices to rise if capacity is stimulated less than the rise in the money supply.

And this works in the opposite direction. If money supply falls, output might fall by an even larger amount, leading to rising prices.

This is certainly a very toxic mix. Expect to get poorer.

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  • 284 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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