I won't quarrell with your view that the dollar could go higher as I think, short-term, it could go either way.
However, I do question your interpretation of the charts you supplied. Let me preface this by saying that these percent of change in money supply charts have always mystified me.
Using the top chart as an example, I understand that to mean that the rate of increase in money is slowing, but is not yet negative, which in turn means money is still being added to the economy. The chart does not show any decrease in money supply. So, for example, the chart you supplied relating to MZM shows that in 2001 there were two occasions when the increase in money supply over what it was 3 months prior approached 6%. More recently it is under 1% more than it was 3 months ago. So if, for example, the MZM were 100 and three months ago it was increasing at the rate of 5% per annum, I guess that means that the increase that month was 1/12 of 5 or 4/10 of one percent increase that month, which mean money supply increased to 100.4 in that month. If 3 months later the chart shows money supply increasing at 1% over its rate 3 months ago, I would assume that money supply in that month is growing at the rate of 6%. and the increase in the money supply for that month would bring the money supply to 101, roughly. Even if the figure were a negative 3%, that would only mean that the money supply is increasing at the rate of 3% not that the actual growth of money is negative.
Is this your understanding. Maybe you or someone on the thread who is more knowledgeable than me could explain this?
Little joe |
