Thursday 22 April 2010

Update on exponential money supply growth

In a post a few days ago, I showed what I consider to be an exponential rate of growth in the UK M4 money supply ("money" defined as "cash and credit").

Today a friend who actually knows what they are talking about kindly directed me to the official M4 money stock data (many thanks ;-) ). This statistic is called "AUYM" by the Bank of England and they publish it monthly. This data is available for as far back as the end of the third quarter 1998, if you can be bothered to piece it together from their old reports.

Apparently a Mr G. Brown changed the methodolgy of how this statistic is compiled around that time (can't think why...) so it is impossible to meaningfully go back any further than this. Thanks again to you also then, Gordon - nothing quite like a nice spot of goalpost-moving to prevent people tracking reality is there? :-\

Anyway, this all means that I can now present an updated graph of UK M4 (broad money) growth with offical data in it, albeit over a shorter duration than previously used. The bad news is it turned out the growth was actually quite a lot larger than I had previously computed from the combination of National Statistics and Bank of England data. Bummer! :-(

Since this data only covers about ten years or so, I have also accordingly reduced the exponential trend line projection to 10 years rather than 25 previously. You can see that at the current rate of accelleration your money will be worth less than half what it is now in ten years time, unless something changes lickety-split. To spell it out, this is how your beloved government and the banks between them take the bulk of your wealth from you, without you even realising it is happening.

As before, I am entirely happy to provide you with a copy of the Excel file containing this data and the graph, here, in case you want to play around with it.

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