Bernanke is NOT using the printing presses

Discussion in 'Economics' started by Daal, Dec 16, 2007.

  1. Daal

    Daal

    M1 is DOWN at seasonally adjusted annual rates for the past year.
    M2 is more or less equal to NOMINAL GDP(which grows around 6% a year), which means the supply of M2 is matching the supply of new goods in the economy which is not inflationary(fed conspiracy theorists and austrians sometimes forget this little detail)
    http://www.federalreserve.gov/releases/h6/Current/
    What about m3?The fed cant control M3, asking the fed to control m3 is like asking the white house to control the quantity and size of employment contracts in the country,even if they could the results would be disastrous. the inflation is coming from commodities not from helicopters(or m3 for that matter)
     
  2. You can't be serious.
     
  3. gnome

    gnome

  4. Whoa! Analysis!
    Of course, the fact that M2 growth equals nominal GDP does leave them open to the argument that their inflating by the amount over real GDP that they allow M2 to grow.
    OTOH, their more-or-less stated goal is inflation at 2% or less, same as the ECB, so 6% is just about perfectly in line with that.
    On the third hand, the sustainable rate of growth in real GDP is probably around 4, so this is pretty much Goldilocks.
    Of course, the Fed thinks it's somewhat less than that, as do most mainstream economists, but I think 4 is sustainable for now.
     
  5. Daal

    Daal

    lol,then why you guys want them publishing M3 so bad
     
  6. Seriously, is that even a remotely appropriate response?
    It seems you can never underestimate the depths of depravity an Austrian/Fed conspiracist ET'er will go to in the name of their pet paranoia.
     
  7. nice website. thanks for posting.