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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Richard Nehrboss who wrote (70055)	11/4/1999 9:00:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Richard, I used to keep a spreadsheet with the various credit levels vs. GDP. (government, consumer, corporate, financial system etc..) I haven't updated them in over a year. Now I intend to just glance at the flow of funds statements once a year to see if anything surprising is going on. There's no question that the credit levels relative to GDP exploded in the 80s. It leveled off for awhile after that but I think it's picking up again. Financial system credit exploded in the 90s. I'm still on the fence about the significance of that other than it adds some risk. One of the reasons I stopped paying so much attention to it is that I'm highly suspect of all the government data, especially GDP. There's too much not counted and a lot of controversy in the areas that are. Here's the flow of funds link: bog.frb.fed.us Wayne

To: Richard Nehrboss who wrote (70055)	11/4/1999 10:20:00 AM
From: pater tenebrarum	Respond to of 132070

Richard, off the top of my head i can tell you that household debt is now at 98% of income...corporate debt is at a post depression record, i'll see if i can link you to the exact numbers later today. one more thing, money supply has increased by more than 200% over the last decade. we don't call him 'easy Al' for nothing..<gg> later, hb

To: Richard Nehrboss who wrote (70055)	11/4/1999 12:50:00 PM
From: Mike M2	Respond to of 132070

Richard, I'll put some data up tonight but I can tell you that in the 20's the adjusted monetary base grew 61%. Wayne's site Value Investor work Shop has a table of the monetary aggregates going back to the 80s. One critical aspect that many overlook is the role of nonbank credit which is not captured in the monetary aggregates since they are outside the banking sytem. In 1998, the financial sector ( nonbank)created more credit than the banking sector. mike

To: Richard Nehrboss who wrote (70055)	11/5/1999 8:11:00 AM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Richard, sfgate.com:80/cgi-bin/article.cgi?file=/chronicle/archive/1999/11/04/ED54888.DTL this article puts money supply growth at 60% since 1995. As I mentioned earlier the adjusted monetary base grew 61% during the 1921-29 boom. I must also emphasize the role of nonbank credit which is not captured in the monetary aggregates - I think 1998 was the first year that the nonbank sector provided more credit than the banking sector. I don't know why this is overlooked so often but it does show rampant inflation as defined by the Austrian school of economics - the expansion of money and credit beyond the needs of economic growth and the supply of available savings. Over the weekend I will post some numbers relating to nonbank credit. David Tice covers this subject in his Prudent bear commentaries. mike