Australia and money supply growth

Discussion in 'Markets & Economies' started by rbaggio, Feb 6, 2011.

  1. rbaggio

    rbaggio Active Member Silver Stacker

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    Was browsing the recent media releases on the RBA site, and came across this one, released a few days ago: http://www.rba.gov.au/statistics/frequency/fin-agg/2010/fin-agg-1210.html

    It states: "Over the year to December, broad money grew by 8.1 per cent."

    Broad money is defined as ".... M3 plus other borrowings from the private sector by AFIs, less the holdings of currency and bank deposits by RFCs and cash management trusts." (it's in the Notes tab of the spreadsheet below)

    So, our money supply grew by over 8% in 2010.

    This seems like a big jump over the preceding 12 months: http://www.rba.gov.au/statistics/frequency/fin-agg/2010/fin-agg-0110.html

    It states: "Over the year to January (2010), broad money grew by 3.3 per cent."

    Now, check out the historical growth here: http://www.rba.gov.au/statistics/tables/xls/d03hist.xls (EDIT: Fixed link)

    This shows that the Australian money supply, as defined in 'broad money' terms, has doubled in the last 7 years:
    Dec 2003: $667.4 billion
    Dec 2010: $1329.4 billion

    To me, this sounds both highly inflationary, and evidence of the abundance of credit over the past few years here in Australia.

    Thoughts?
     
  2. villiagegate

    villiagegate New Member

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    I find that highly troubling. If that money was loaned into existence though, would it be fair to say that most of it gas gone into property? Hence why inflation hasn't crept into the broader economy in a significant way? Am I totally off base with this?
     
  3. THUCYDIDES79

    THUCYDIDES79 New Member Silver Stacker

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    The aussie public is losing out on both sides,

    Not only is more money entering the economy ( and thus diluting your current holdings in cash or income ), but your main 'asset' your house is melting in value ( like the time premium for an option buyer whose option is still not in the money ).

    bad + bad = very bad
     
  4. millededge

    millededge Active Member

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    I can't recall the exact reference, but broad money tends to circulate into the economy about 18 months after being created. Will see if I can find the bavkground to this.
     
  5. Guest

    Guest Guest

    But it does illustrate why savers are getting pissed off with Debtors. Their incessant borrowing through debt creation directly devalues (read : steals) the wealth of those who save.

    For the average sheeple, they don't make the connection. For folks who understand fundamental economics, it's enough to point a finger and exchange some hard words.

    I absolutely hate Keynesian economic principle because this is the direct result of such ideology - murder of the saving ethic.

    We devalue the concept of saving, it's not hard to see what offshoot problems arise from such ideology.

    Take it away Max...

    [youtube]http://www.youtube.com/watch?v=qxYi2W9vEfw[/youtube]
     
  6. Slam

    Slam Active Member Silver Stacker

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    The Australian Money supply has to expand to match the other countries that are also devaluing their dollar. Otherwise if our currency supply stalls the end result would be a much much stronger Australian dollar (its already much stronger). Which may also mean we are expanding but not as fast as other countries.

    I believe the expansion has been a result of increased borrowings for property. Or indirectly the result of banks borrowing from overseas converting to Australian dollars then using the FRB system to lend out.

    Its nice to actually see the figures, this proves that there is monetary inflation. The price-inflation CPI is only a result of monetary inflation, I think we should be feeling the effects of this price inflation soon. I'm sure most of you are starting to realise the increases in the price of food and fuel recently.

    One point to note is, the banks are crying poor and eager to raise interest rates. They blame it on the increased cost of funding. I say that is all bullshit. The US is giving away money on near zero rates, same with Japan. I can't see how they can blame it on that. I'm sure big US banks would want to lend to Australia, we have resources and possibly a much less likely chance of default before the US defaulting first.

    So the main reason they say borrowing cost more is because of the exchange rate, the Australian dollar has strengthen. When they were borrowing US dollars, 2-3 years ago. They can exchange the 70 US cents for 1 Australian. Borrowing overseas was worthwhile, because they can buy more Australian dollars and with FRB able to lend more out. The times have changed, they are now borrowing near 1:1, with a chance that if the Australian dollar slips back down to 70 US cent. They will have to pay more back to service that debt. Hence they are crying poor and want to hedge against that risk. Also look at the record profits over the last few years, I believe the Strengthening of the AUD has something to do with this. But think about the loans they have to pay off now, its actually cheaper in USD terms, the AUD has strengthened.

    Now the M3 money supply has also expanded as a result of borrowings from overseas. When they borrow and buy AUD, this acts like a deposit to the bank. Hence they can automatically loan money into existence from this pool.

    So the fking Yanks have exported their problems worldwide, why do you think china is having inflation problems, everywhere in the world is having inflation problems. The money supply is just expanding everywhere due to the global economy and the ability to just borrow from any bank that will lend you money.

    Slam
     
  7. Slam

    Slam Active Member Silver Stacker

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    Good luck to one world system, I don't think it will ever happen. China will give them the finger and we will probably see a war.

    The only way this can play out peacefully is if currency is backed by gold or a basket of hard assets. I believe if China can get enough gold reserves and announce the backing of the RMB with gold/silver/oil/food/land/labour units. Then the RMB may become the worlds new reserve currency. They have the factories and manufacturing base, they have the people and labour to produce enough goods. All other currencies will also need to be based off a similar standard. Otherwise no one will accept your new fiat currency.

    We are living in historic times, I just want to make the right decision so I have a story to tell to the grand kids in 30 years time =D.

    Slam
     
  8. rbaggio

    rbaggio Active Member Silver Stacker

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  9. thatguy

    thatguy Active Member

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    just told my dad that 8% number then asked how much he was getting for his term deposit... 5%! Then i told him he just lost 3% in a year.... Answer!???? Oh well

    Oh well.... vvtf??!??!
     
  10. happyjoelucky

    happyjoelucky Member

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    AS the USD declines and perhaps the US bases drain too much of the fiat away from the US another looming crisis for Australia is, we will be responsible for more military spending. It will also be a problem especially for Germany and Japan if they become more responsible for their own military spending. Japan already digging into its savings has some huge problems ahead e.g. food, oil, minerals etc.
     
  11. rbaggio

    rbaggio Active Member Silver Stacker

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    Latest update:

    Over the month of February, M3 rose by 0.5 per cent and broad money increased by 0.6 per cent. Over the year to February, broad money grew by 8.0percent.
     
  12. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

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    half a percent in just 1 month ...bloody hell !!!!!
     
  13. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    Yeah and that's what they are reporting!

    I wonder if that takes into account the money they printed to bribe the asian officials to print currency for them as well?

    What? The RBA is beyond reproach and their published statistics on their backroom BS can be relied upon unquestionably.

    Don't you love these guys? They're averaging 10% money supply growth over the past 12 months (reported), diluting your share of the pie by 10% and then they bribe foreigners so they can print currency for them as well.

    Can you get any more crooked?

    Makes me want to puke my guts up every time the preists of the Holy Money Machine poke their heads out from under their rock and pronounce what our money is worth. My brain goes into a conniption fit trying to grasp the scale of their fraud and deception. Through the burst blood vessels, spasms and vomit, I am left in a groveling, writhing mess with every announcement and forecast. The only thing that keeps me clinging to this fragile existence is the knowledge that humanity will prevail over these black magicians because our hearts are pure and our cause is just. Liberty!!!! We will be emancipated in the end.

    Or we can just sit back watch our stack increase in nominal value and keep buying silver as a vote against their antics.
     
  14. Silverthorn

    Silverthorn Well-Known Member

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    Got to take into account the growth rate of the economy as well though.
     
  15. Goldmember

    Goldmember Member

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    As per usual ...the Aust Govt copy what the yanks do
     
  16. zargor

    zargor Member

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    That was a highly descriptive and articulate outburst, Gino. Well done!

    Zargor:)
     
  17. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    Glad you liked it. Although I must say, it isn't a pretty sight!

    But I did fail to clearly articulate my point in regard to the blackhearted, currupt, theiving, fit inducing RBA. And that is they bribe people with the money they print out of thin air. Print the currency, set its value, then use that artificial value and product to buy influence so they can perpetuate their game and inflict it upon the south-east asian nations.

    I wonder if this has anything to do with the gold dinars and silver dirhams being circulated in Malaysia?
    http://constitutionaltender.blogspot.com/2011/03/another-state-in-malaysia-introduces.html

    Heaven forbid the people should adopt sound money. What ever will a central banker do when he no longer has the power to print new currency?

    Oh, no! I can feel that twitch starting up again. . . damn! Too late! So much for those Corn Flakes. - LOL
     
  18. damien192x

    damien192x New Member

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    Thankyou for this post.
    Also - This "M3" number, is it true that in the USA they have REMOVED access to it so people can't see how much $$ are floating around?
    Why is that even allowed? What the freaking F*** ?
     
  19. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    Yes. Here are some info sources for you:

    1) Australian Monetary Aggregate Statistics - RBA
    http://www.rba.gov.au/statistics/tables/index.html#money_credit

    2) US Monetary Aggregates - ShadowStats
    [​IMG]
    Source: http://www.shadowstats.com/alternate_data/money-supply-charts

    The red line ends when the propaganda begins . . . er, I mean, reporting of M3 ends.

    3) A running dialogue on monetary shenanigans in relation to Gold - Jim Sinclair's Mineset
    http://jsmineset.com/
     
  20. rbaggio

    rbaggio Active Member Silver Stacker

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