UK money numbers continued to show absolute and relative strength in February, suggesting a coming domestic demand boom with unfavourable balance of payments and inflation consequences. Continue reading

Chinese money trends have been signalling an economic slowdown in H1 2020. This appears to be playing out but the PBoC has kept policy tight and narrow money growth has fallen further in early 2020. A Chinese slowdown could derail current global reflation optimism. Continue reading

Last year’s US (and global) broad money surge is expected, on the “monetarist” view, to be reflected in a significant inflation rise over 2021-22. US broad money* growth, however, has normalised recently: six-month expansion has retreated from 41% at an annualised rate in July to 4.3% in January. Stabilisation at the current pace would suggest an eventual return of low inflation. Continue reading

UK broad and narrow money measures continue to surge, with growth now significantly above that in the Eurozone – a reversal of the norm in recent years. This suggests strong near-term prospects for domestic demand and support for UK equity prices but at the likely cost of a sizeable deterioration in the balance of payments combined with much higher inflation. Continue reading