4 ms·

When you adjust for money supply inflation (peak at around 24%) instead of price inflation (peak at around 9%), every indicators become very red. I think money

When you adjust for money supply inflation (peak at around 24%) instead of price inflation (peak at around 9%), every indicators become very red. I think money supply inflation reflects more the reality and explain the current bearish sentiment.

JumpCrisscross 4y ago
> adjust for money supply inflation (spiked at around 24%) instead of price inflation (spiked at around 9%) The former is a fake metric. Measuring changes in the monetary base [1] is a thing. But it’s seldom accurately reflected in a single figure. Also, the 2.6% is real GDP growth. Current-dollar growth was 6.7% annualised [1]. [1] https://en.wikipedia.org/wiki/Monetary_base https://en.wikipedia.org/wiki/Monetary_base [2] https://www.bea.gov/news/2022/gross-domestic-product-third-quarter-2022-advance-estimate https://www.bea.gov/news/2022/gross-domestic-product-third-q...
- hartator 4y ago
  > the former is a fake metric. I am using M2 money supply. Basically trying to proxy how much money more we printed this past few years. Source: https://www.longtermtrends.net/m2-money-supply-vs-inflation/ https://www.longtermtrends.net/m2-money-supply-vs-inflation/
  - nightski 4y ago
    That could be skewed because they changed how M2 was calculated during the pandemic.
    - giantg2 4y ago
      This makes me feel better. /s
      - cko 4y ago
        It should. https://collabfund.com/blog/the-fed-isnt-printing-as-much-money-as-you-think/ https://collabfund.com/blog/the-fed-isnt-printing-as-much-mo... Also money printing isn't necessarily inflationary if the money stays as bank reserves. Unless... The Fed buys treasuries and the government dumps the money on the economy.
        giantg2 4y ago
        It just obfuscated things. It might not be a 350% increase, but it's still a 70% increase, right?
  - JumpCrisscross 4y ago
    > am using M2 money supply It makes no sense to use a November 2020 rate of change in M2 to adjust a Q3 2022 real GDP estimate. GDP is a production metric. An output of the real economy. M2 is a monetary metric. An input into the financial system. To the degree their relationship has meaning, it’s as a rough measure of financialisation [1]. [1] https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?most_recent_value_desc=true https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?most_...
  - roflyear 4y ago
    Why does that matter?

JumpCrisscross 4y ago

> adjust for money supply inflation (spiked at around 24%) instead of price inflation (spiked at around 9%) The former is a fake metric. Measuring changes in the monetary base [1] is a thing. But it’s seldom accurately reflected in a single figure. Also, the 2.6% is real GDP growth. Current-dollar growth was 6.7% annualised [1]. [1] https://en.wikipedia.org/wiki/Monetary_base https://en.wikipedia.org/wiki/Monetary_base [2] https://www.bea.gov/news/2022/gross-domestic-product-third-quarter-2022-advance-estimate https://www.bea.gov/news/2022/gross-domestic-product-third-q...

hartator 4y ago
> the former is a fake metric. I am using M2 money supply. Basically trying to proxy how much money more we printed this past few years. Source: https://www.longtermtrends.net/m2-money-supply-vs-inflation/ https://www.longtermtrends.net/m2-money-supply-vs-inflation/
- nightski 4y ago
  That could be skewed because they changed how M2 was calculated during the pandemic.
  - giantg2 4y ago
    This makes me feel better. /s
    - cko 4y ago
      It should. https://collabfund.com/blog/the-fed-isnt-printing-as-much-money-as-you-think/ https://collabfund.com/blog/the-fed-isnt-printing-as-much-mo... Also money printing isn't necessarily inflationary if the money stays as bank reserves. Unless... The Fed buys treasuries and the government dumps the money on the economy.
      - giantg2 4y ago
        It just obfuscated things. It might not be a 350% increase, but it's still a 70% increase, right?
- JumpCrisscross 4y ago
  > am using M2 money supply It makes no sense to use a November 2020 rate of change in M2 to adjust a Q3 2022 real GDP estimate. GDP is a production metric. An output of the real economy. M2 is a monetary metric. An input into the financial system. To the degree their relationship has meaning, it’s as a rough measure of financialisation [1]. [1] https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?most_recent_value_desc=true https://data.worldbank.org/indicator/FM.LBL.BMNY.GD.ZS?most_...
- roflyear 4y ago
  Why does that matter?