According to the Econmist's figures the Euro, broad or M3, has been increasing by ~10%/year. Not being privy to the meetings I don't know why they have decided to do this but the recent buget deficits of France and Germany (and Italy!) requiring borrowing coupled with the devaluation - through inflation - of the US dollar are, I'm guessing here, primary reasons.
Scope of Money Supply"
Broader measures include money held as a store of value. Different measures of money have different technical definitions. The most common measures are named M0, M1, M2, and M3 (from narrow to broadly defined). In the United States they are as follows, as defined by the Federal Reserve: M0: The total of all coins 'minted' and paper 'printed' cash in circulation. (i.e. currency) M1: M0 + the amount in demand accounts (also called "checking account" or "current account") M2: M1 + other various savings account types, money market accounts, and certificate of deposit accounts (CDs) of under $100,000. M3: M2 + all other CDs, deposits of eurodollars and repurchase agreements. As of March 23, 2006 information regarding the M3 will no longer be published by the Board of Governors of the Federal Reserve System, in contrast to the other three reports of the United States money supply, provided in detail .
Can anyone expect
I can definitely not type this week. guaranteed to evoke a violent reaction from police is to challenge their right to "define the situation." --- David Graeber citing Marc Cooper
Or the road running from Sunbury to Chandlers Ford.
Take your pick. ;-)
Don't rightly know the reason(s) the Fed isn't going to publish the M3 number anymore. I'll scout around tonight and see what I can find.
By the way, according to the Wikipedia article, as of July 28, 2005, the figures were:
Rise of consumer prices as measured by CPI? Net increase in money supply? Gross increase in money supply? Excess increase in money supply over some criteria? (And what does "Excess" mean?)
Each of these have their uses for reasons too long to get into here.
The usual figure used to estimate inflation in quantification analysis is the Consumer Price Index more to keep things somewhat simple than the superiority of the (political massaged) figure. As I shall attempt to show.
To really get at inflation you need to take the total rise of M3 minus the amount of increase used for long and medium term investment (> 1 year) as adjusted by the rise (if any) in the cost of goods and services caused by that increase in M3, the overall price affect by the increase, minus the amount of loss actually realized during the time period in any investment, the velocity of the money (how fast the currency changes hands) ... and I'm sure I've forgotten something(s). This indicates why M3 is so important as it is the basis from which any further calculation must start.
I like to use the M3 figure as a stand-in for how much the plutocrats have had to play with, as they are first in line to get the additional money, and the yield on the 10 year bond for the market consensus prediction of inflation over the time to maturity (1 month, 3 years, 7.5 years ... whatever.)
The difference between these two figures should, roughly, agree with GDP if the money supply is 'stable.' Over the last 4 years they have not agreed intimating Greenspan has been pumping more money into the economy than is actually required causing the excess to flow into the housing and other bubbles.
MHO. YMMV.
