Tuesday, August 26, 2008

Monthly data for July show that the broad money growth has almost collapsed

CRUNCH TIME: Set the crash-alert flags at half-mast

Sharp contractions in the money supply and recession are two spokes on the same wheel. When the money supply shrinks, there's less economic activity, and the economy slows; it's as simple as that. An article in this week's UK Telegraph by Ambrose Evans-Pritchard shows that the country is sliding inexorably into the jaws of a deep recession. The persistent credit-drain from rising foreclosures and deleveraging financial institutions is shrinking the money supply. Now it's visible in the data. Bernanke's low interest rates haven't stopped the hemorrhaging The whole "stimulus" plan backfired. Americans did the responsible thing and used the money to pay off debts or stash it in savings instead of than wasting it Walmart or Target on more useless knick-knacks.

Posted by malct @ 03:24 PM (701 views)
Please complete the required fields.



2 thoughts on “Monthly data for July show that the broad money growth has almost collapsed

  • japanese uncle says:

    Congratulation on having successfully normalized the scrol feature!

    Anyway this is yet another convincing evidence that deflation rather than inflation is just around the corner.

    Reply
    Please complete the required fields.



  • Yes, and US GDP grew… Damn those inconvenientzzzz statistiks…

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>