2012-01-11

Chinese M2, Shanghai Composite, Federal Reserve comparisons

Chinese money supply growth in December 2011 was actually about 16% year-over-year, not the 13.6% reported by the PBOC, because their number is the 2011 growth rate. I noticed this when I tried using their growth number and the previous year's M2 number to calculate December's M2 total and found it showed a decline in M2. However, I did match their numbers by going off of the starting M2 for 2011. In any event, here are some charts, some updated and some new.

The first compares M2 money supply in China and the U.S. The Chinese title is an idiom about a soldier who runs away for 50 yards laughing at the soldier who ran away 100 yards, alluding to Chinese criticism of U.S. money printing. The second is a new one, the year-on-year change in money supply as calculated by me, using PBOC and FRB numbers. The third is also a new one. Previously I've compared MTM changes in Chinese M2 to MTM changes in the Shanghai Composite. It gives a noisy picture of what the third chart, using year-on-year numbers, more clearly shows: a general deceleration in money supply growth and a decline in stock prices.

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