We need a recession to cure the overspending and debt accumulation habits of government and consumers.
M3 chart doesn’t reflect productivity nor does it account for old money being removed from the system. There are many things cheaper now than a couple years ago, namely 99% of electronics, most clothing, housing, etc. Even prescription drugs are now flat and if you know where to look are cheaper than in many years. Energy isn’t up much in the last year (although it’s up a lot from its all time lows a decade ago). Food started to creep up but has slowed down and probably will continue to (The grocery chain I work for has similar inflation #s to the PPI/CPI for Food). I just don’t see this ‘rampant’ inflation at the moment that some of you claim to see everywhere except in commodities which do not appear to be spilling over into other prices.
yeah, if anything inflation is more benign that the data indicates ...
A recession described as a "cure?" Tell you what, if you think it is a cure, you go first and tell us how it goes. If, after experiencing it, you still feel like the rest of us need one, we'll take a look at how you have fared and perhaps put it up for a vote at the next meeting. Until then, let's consider the issue "on hold". Keep in touch and take copius notes. Better yet, start a blog so we can see your progress through the experience.
From the links here, it looks like M3 includes Eurodollar deposits. You can see the M1s in the US are actually down year over year while the Euro M1 is way up. This leads me to believe the larger amount of M3 in the US is due to almost entirely the Eurodollar. Furthermore, even ignoring that the M3 here in the US is less than or almost identical to that of other countries including Aussie, Canada, UK, Eurozone, China, etc. Pretty much everywhere except Japan (which the dollar is doing just fine against). Again, I believe the dollar is down to other factors, most notably investors/speculators.