As a follow-up to my previous post on the subject, I decided to try an alternative methodology that compares gross public spending and net private debt on an annual basis in analyzing the composition of new money creation.The View From Mars
Does Credit Drive The Economy Part II
Paul Meli
5 comments:
Lately we can see from the H.8 report that Loans and Leases in Bank Credit is up about 300B YoY (Page 2 , Line 9):
http://www.federalreserve.gov/releases/h8/current/default.htm
Meanwhile, $NFA creation so far this year from the Withdrawals side of the DTS here:
https://www.fms.treas.gov/fmsweb/viewDTSFiles?dir=w&fname=13060400.pdf
Indicates that just in the 8 months FY to date, Oct thru this past Tuesday is $2.986T ... on track for about $4.5T by year end... has been averaging about $380B per month this FY...
(Computed by taking Total TGA withdrawals and subtract those withdrawals made for UST redemptions...)
So govt has been injecting about $380B/mo and "US Retail sales and food services excl motor vehicle and parts" are running at about $325B per month...
http://www.census.gov/retail/mrts/www/benchmark/2013/excel/benchsales13.xls
Like Paul asserts, 'looks like it is all fiscal from here...'
rsp,
Paul, good work, that's quite a powerful graph.
Thanks Paul. I agree that that is more good work.
In combination with a previous post here about QE and falling inflation expectations, this drives home the disinflationary aspects of repeated QE. QE is all about reducing interest paid into the economy by the Federal government. We are now into the 7th year of reducing such government expenditures. This is no doubt one of the major reasons that your graph shows government flattening out in recent years for only time (from 1970 when the graph begins).
Again, I appreciate the follow through on this topic and hope some other MMT - MR folk will contribute their thoughts on this way of looking at the economy. It might be helpful to add taxes to the graph. It would then show all the major components of money creation and destruction, and it would be possible to add a net money creation line...
...
Paul,
I may have discovered a dangerous situation:
http://goldengatebridge.org/research/crossings_revenues.php
Looks like these morons who run the Golden Gate Bridge operations in the SF area are actually keeping track of the vehicles that are traveling in both directions....
Dont they realize that what really matters is just the net of vehicles that travel in one direction vs the other????
THIS COULD BE A DANGEROUS SITUATION....
MNE readers in the Bay area: Proceed with caution!!!
Post a Comment