Thursday , June 17 2021
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Tag Archives: Money Supply

Dollar Reserves Held By Central Banks Fall To 59%…

A Pfennig For Your Thoughts May 12, 2021 * Currencies drifted on Tuesday… * Gold fights back on Tuesday to erase an intraday loss!  Good Day… And a Wonderful Wednesday to you… As the group Chicago sang many years ago, I’m feeling stronger every day…. The pain in my stomach from the pulled muscle, is not as sharp of a pain, but still painful… I’ve got a ton of stuff to talk about today, so the markets will be playing second fiddle to all my thoughts today… That sure was a nice win for our...

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What causes recessions?

More specifically, what causes non-Covid recessions? Here’s Nick Rowe’s answer: At some level, Nick and I basically agree.  But I am going to answer the question slightly differently.  It’s not necessarily wrong to say recessions are caused by money hoarding, or by interest rates being set too high, or by a drop in spending on C+I+G+NX, but I don’t find any of these explanations to be the most useful way of framing the issue. In my forthcoming book (July 16, 2021), I...

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The Factors in the Drastic Money Supply Drop from 1929 to 1933

In Jeff Hummel’s Monetary Theory and Policy class recently, he assigned an interesting computational problem that shed light on the main factors driving the drop in the U.S. money supply between 1929 and 1933. He used a problem from Greg Mankiw’s Intermediate Macro text. The problem didn’t give magnitudes but I assume everything was in billions of dollars. The money supply was $26.5 billion in 1929 and $19.0 billion in 1933. That’s a drop of 28 percent. Here was the...

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Tuesday Was “Moving Day”….

A Pfennig For Your Thoughts * The euro finally breaches 1.23! * Oil price trades above $50….  Good Day, and a Wonderful Wednesday to you! Thanks to all who sent along a note yesterday, confirming something that I already knew… That you dear Pfennig readers, are the best! OK, tried to stay awake for the Missouri Tigers basketball game VS Miss. St. last night, but one thing you learn when you come from west of the East Coast… The time difference doesn’t seem like much, but a game that...

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US Money Supply Continues to Expand at Record Pace

The money supply grew by 37.08% year-on-year in November based on the True Money Supply Measure (TMS). It was effectively the same rate of growth we saw in October and remains near September’s all-time high rate of growth.The staggering growth in the money supply becomes more clear when you compare this year with last. TMS growth in November 2019 was just 5.9%.The TMS set all-time records eight straight months leading into October. September’s record rate was 37.54%. October’s year-on-year...

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No Inflation? Money Supply Continues to Grow at Record Rate

To hear Federal Reserve officials, politicians and mainstream financial media pundits tell it – there is no inflation. In fact, the consumer price index remains “stubbornly low” according to those who view rising prices as an economic good. But inflation defined correctly is rampant. In fact, it is at all-time record levels.Strictly speaking, inflation is an increasing money supply, and by that measure, it hs set records for five straight months.Last month, year-over-year growth in the...

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Peter Schiff: Getting the Definition of Inflation Right

What is inflation?When analysts, politicians and pundits talk about inflation, they usually mean rising consumer prices as measured by the consumer price index (CPI). Peter Schiff and Jim Rickards debated this on Kitko news. Rickards also used this definition, insisting there is no inflation right now. Peter said, “Of course there is. The Fed is inflating like crazy.”The ensuing debate led Peter to address the issue of inflation on his podcast. Peter called the modern mainstream definition...

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QE Infinity: Money Supply Grew at Record Rate in April

The money supply growth rate surged to an all-time high in April as the Federal Reserve created cash at an unprecedented rate through quantitative easing and other money-creating monetary policies.According to Ryan McMaken at the Mises Institute, the only time the Fed has come close to this level of money creation was in the 1970s – the era of stagflation. It was expected that money supply growth would surge in recent months. This usually happens in the wake of the early months of a...

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Peter Schiff: Everything Old Is New Again

Years ago, markets used to pay a lot of attention to the money supply and trade deficits. Now, these numbers barely get a passing mention. In his latest podcast, Peter Schiff said he thinks what is old will become new again and trade deficits and money printing will once again come front and center.The dollar has been trending weaker over the last few weeks and bond prices have been falling, with bond yields increasing accordingly. Peter said this reveals the problems that are building in...

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The Reasoning Behind Gold’s Breakout

Goldmoney Insights Gold’s dramatic move above $1400 has caught the investment establishment by surprise. Physical gold ETFs, as a proxy for direct portfolio investment, amount to only 0.05% of the estimated $250 trillion of global investment values. As well as being badly wrongfooted, investment managers have little understanding of the role of gold as money, believing it to have no role in the monetary system. They will have to undergo a rapid re-education. This article addresses their...

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