pop Posted January 20, 2006 Share Posted January 20, 2006 Also, the second group of figures appears to be accelerating (from Aug) quite rapidly. that's because it's being used to fill his black hole. if you can't raise the money then print it. Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted January 20, 2006 Share Posted January 20, 2006 There is no mystery to this, there is a strong demand for debt, still. It's good, we won't get the sort of crash we're after without more household debt. Good things come to those who wait. Quote Link to comment Share on other sites More sharing options...
String Theory Posted January 20, 2006 Share Posted January 20, 2006 There is no mystery to this, there is a strong demand for debt, still. It's good, we won't get the sort of crash we're after without more household debt. Good things come to those who wait. The acceleration of money supply through credit can only be sustained without inflation officially appearing in CPI when there is a space that is able to receive it. Housing for many years has provided this space. There is no increase in productivity, GDP, capital expenditure, and now it appears personal debt has been engorged. Where will this money show up next? Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted January 20, 2006 Share Posted January 20, 2006 The acceleration of money supply through credit can only be sustained without inflation officially appearing in CPI when there is a space that is able to receive it. Housing for many years has provided this space. There is no increase in productivity, GDP, capital expenditure, and now it appears personal debt has been engorged. Where will this money show up next? If I borrow say £200k to buy a house from someone who is mortgage free, they have to do something with the money. They can spend it, in which case it is circulating in the economy (and should raise CPI), or they can bank it, in which case the bank will attempt to loan it to someone. For it to lie idle, i.e. to appear in M4 but not raise CPI, I take it the money has to lie dormant in the bank? i.e. the banks cannot lend money quick enough, hence the reason why they appear to be force feeding us with debt? Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted January 20, 2006 Share Posted January 20, 2006 If I borrow say £200k to buy a house from someone who is mortgage free, they have to do something with the money. They can spend it, in which case it is circulating in the economy (and should raise CPI), or they can bank it, in which case the bank will attempt to loan it to someone. In the real world unless you want to live in the park you'd at least spend some of it on a smaller home and your new Mercedes will appear on the trade deficit, or you'd take it Spain and prop up their bubble. I think the new outlet is the stock market and hedge funds, the latter have the need for copious amounts of leverage. Quote Link to comment Share on other sites More sharing options...
String Theory Posted January 20, 2006 Share Posted January 20, 2006 If I borrow say £200k to buy a house from someone who is mortgage free, they have to do something with the money. They can spend it, in which case it is circulating in the economy (and should raise CPI), or they can bank it, in which case the bank will attempt to loan it to someone. For it to lie idle, i.e. to appear in M4 but not raise CPI, I take it the money has to lie dormant in the bank? i.e. the banks cannot lend money quick enough, hence the reason why they appear to be force feeding us with debt? Look, the dow is down 153 POINTS as I write and GOOG is down 6%. Your mortgage free sellers have put their money somewhere - let's sa a mutual fund that invests it somewhere seeking return (risk), Right now almost every asset class is saturated with liquidity, lots of money chasing more money, and to top it off, governments feed the fire by injecting huge amounts of cash to keep the ponzi game going. Credit is just one aspect of where this cash has to bulge out. What I'm saying is that conveniently it doesn't seem to be bulging out in official stats that would lead to an orderly mareket correction. The stakes at this point are too high to disappoint. Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted January 20, 2006 Share Posted January 20, 2006 (edited) If I borrow say £200k to buy a house from someone who is mortgage free, they have to do something with the money. They can spend it, in which case it is circulating in the economy (and should raise CPI), or they can bank it, in which case the bank will attempt to loan it to someone. For it to lie idle, i.e. to appear in M4 but not raise CPI, I take it the money has to lie dormant in the bank? i.e. the banks cannot lend money quick enough, hence the reason why they appear to be force feeding us with debt? M4 comprises both the deposits in accounts by people wanting to save, together with deposits created by banks and building societies through their lending activities. As for raising CPI, if the money is not spent on items within the CPI basket then it will not influence. Edited January 20, 2006 by dom Quote Link to comment Share on other sites More sharing options...
MrB Posted January 20, 2006 Share Posted January 20, 2006 It wont , which is why isn't causing inflation no more than it has in the recent past. Here is historical M4 growth since 1996 31-Jan-99 7.9 28-Feb-99 7.6 31-Mar-99 7.2 30-Apr-99 7.6 31-May-99 7.3 30-Jun-99 5.7 31-Jul-99 4 31-Aug-99 4.6 30-Sep-99 2.9 31-Oct-99 3.4 30-Nov-99 3.6 31-Dec-99 4.1 31-Jan-00 3.4 29-Feb-00 3.3 31-Mar-00 5.3 30-Apr-00 5.2 31-May-00 5.6 30-Jun-00 6.6 31-Jul-00 7.2 31-Aug-00 8.8 30-Sep-00 8.9 31-Oct-00 8.8 30-Nov-00 8.3 31-Dec-00 8.3 31-Jan-01 9.7 Look at the above numbers, particularly mid 1999 to mid 2000. House prices seem to have a lagging correlation with M4. House prices (Nationwide) Apr-00 £80,893 May-00 £81,006 Jun-00 £81,452 Jul-00 £81,133 Aug-00 £80,737 Sep-00 £80,672 Oct-00 £81,036 Nov-00 £81,770 Dec-00 £82,188 Where M4 went down houses hardly moved. Only a 1.6% increase during the middle of the boom. Worrying sign for the 'spring bounce', maybe it will actually happen this year, I wouldn't be surprised. Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted January 20, 2006 Share Posted January 20, 2006 Look at the above numbers, particularly mid 1999 to mid 2000. House prices seem to have a lagging correlation with M4. It was all going into the flavour of the day, dotcoms. Quote Link to comment Share on other sites More sharing options...
pop Posted January 20, 2006 Share Posted January 20, 2006 m4 has got nothing to do with debt. m4 is a measure of how much money they are stealing off of savers. http://www.abelard.org/inflation.htm usa call it m3 data, apparently they are not suppying it anymore after march2006. all countries do this. but 13% is taking the piss. Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted January 20, 2006 Share Posted January 20, 2006 (edited) m4 has got nothing to do with debt. m4 is a measure of how much money they are stealing off of savers. http://www.abelard.org/inflation.htm ^^ I'd take that site with a serious pinch of salt, I've seen that guy on usenet, his musings usually spill over from new world order bull$hit groups when somebody cross posts a message to a normal group. Our version of M4 is equivalent to M3 in the states and very much associated with the creation of money through debt. Edited January 20, 2006 by BuyingBear Quote Link to comment Share on other sites More sharing options...
pop Posted January 20, 2006 Share Posted January 20, 2006 ^^ I'd take that site with a serious pinch of salt, I've seen that guy on usenet, his musings usually spill over from new world order bull$hit groups when somebody cross posts a message to a normal group. Our version of M4 is equivalent to M3 in the states and very much associated with the creation of money through debt. I've got nothing to do with that site. I haven't posted on usenet for over 10 years. If you read that site, it explains how inflation works. (that's all you should use it for) inflation is directly proportional to new (free) money printed (by gb). please post usenet links, I'd be interested. Quote Link to comment Share on other sites More sharing options...
BuyingBear Posted January 20, 2006 Share Posted January 20, 2006 (edited) I've got nothing to do with that site. I haven't posted on usenet for over 10 years. No, I was referring to the guy behind the site not you in particular. He doesn't seem to appreciate the true tie in with debt creation. However, I did see you in the off licence on Tuesday night Edited January 20, 2006 by BuyingBear Quote Link to comment Share on other sites More sharing options...
pop Posted January 20, 2006 Share Posted January 20, 2006 No, I was referring to the guy behind the site not you in particular. He doesn't seem to appreciate the true tie in with debt creation. However, I did see you in the off licence on Tuesday night it's true that they could use the money created (stolen from savers) to supply as even more debt to new borrowers. (despite borrowers already having a never ending supply of choice). Quote Link to comment Share on other sites More sharing options...
nimmmm Posted January 21, 2006 Share Posted January 21, 2006 So, would it be correct to say that there is a correlation between the amount of broad money available, and asset price inflation? If so, would it not also be correct to say that if the amount of M4 money decreased (I believe that it is being shipped in from Asis to be lent back to us by earstwhile Asian savers) significantly, then we would see the end to house price gains of the like we have seen in the past few years? Or would affordabililty constraints "bite" of their own accord and prevent YOY rises above inflation? Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted January 21, 2006 Share Posted January 21, 2006 So, would it be correct to say that there is a correlation between the amount of broad money available, and asset price inflation? If so, would it not also be correct to say that if the amount of M4 money decreased (I believe that it is being shipped in from Asis to be lent back to us by earstwhile Asian savers) significantly, then we would see the end to house price gains of the like we have seen in the past few years? Or would affordabililty constraints "bite" of their own accord and prevent YOY rises above inflation? You don't get one without the other. Affordability creates M4, M4 creates inflation in assets where it is spent. People may have plenty of savings and M4 stays relatively low. However when borrowing becomes attractive M4 increases, trade takes off and money is deposited in accounts. Quote Link to comment Share on other sites More sharing options...
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