« End of world not nigh | Main | Brown: the market's verdict »

March 26, 2009

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

kinglear

I've always thought inflation was much more allied to the exchange rate and Union greed....

Andrew Lilico

All this misses the point. The Bank of England's quarterly inflation report produces an adjusted M4 series (see Chart 1.2), and has done at each inflation report since August last year. This shows adjusted M4 growing at just 3.8% annually and having dropping like a stone - implying three-monthly negative growth. Back in 2006 adjusted M4 was growing at above 14%, and the average since 1992 is 8%. There is a very significant monetary contraction going on, implying considerable deflationary pressure.

chris

The adjustment Andrew refers to simply strips out financial institutions' cash holdings, to leave households and companies' bank deposits.
I agree - and indeed said so in my day job some time ago - that the fall in the latter is a recessionary sign. However, the fall seems to have stopped recently:
http://www.bankofengland.co.uk/statistics/fm4/current/index.htm

Svenson in Australia

I really don't get why USA is undergoing recession. They seem to be dug deep into money problems. What happened to Uncle Sam?

diogenes1960

don't you need to strip out the influence of the velocity of circulation before you can make sense of this data?

Glenn

nah I don't get that people still talk about the Phillip's curve. Its not a theory or set of observations that has been conclusively proven. Data is volatile. There is no proven automatic link between inflation and unemployment. There is a relationship, but no-one know's that it is causal for sure.

Better as the Phillip's theory?

rolex daytona

And a lot of it reflects a switch from bank deposits to securities; foreigners “other investments” in the UK, http://www.watchgy.com/ mostly bank deposits, fell by £143.2bn in Q1. And of course there’s no guarantee such buying will continue.
http://www.watchgy.com/tag-heuer-c-24.html
http://www.watchgy.com/rolex-submariner-c-8.html

chi flat iron

CHI flat iron by Farouk system. Direct from the manufacturer, this genuine Chi ceramic iron comes with valid, one year warranty!

The comments to this entry are closed.

Why S&M?

Blog powered by Typepad