Tuesday, November 21, 2006

New M3 Money Supply Reported by Big Picture Blog

The M3 money supply is a broad measure of money and is an estimate of the entire supply of money within an economy. The thing is, the government stopped reporting the M3 money supply numbers back in March, 2006. It is generally felt that if the government stops reporting information then that is something to watch out for.

What we have now found is that the M3 money supply has been inflated during the time that the government did not report the data. This, I think, leads to inflation concerns. If I am reading the reports correctly, that means that real inflation is running at about 10%, which is much higher than the official CPI numbers of 3%. However, I am going to defer to people who are much knowledgeable about this than I.

1 comment:

teripittman said...

Look at the prices of food (which are not in the CPI). There is a site here:
http://www.shadowstats.com/cgi-bin/sgs/
that has some information about what the real rate of inflation.