Growth increasingly low

Publié le par Jean-Pierre Chevallier

Growth increasingly low

Real GDP growth is increasingly weak in the United States as evidenced by the latest figures of monetary aggregates (on Oct. 25).
M2-M1 continues to grow in its long trend,
Figure 1: http://s3.archive-host.com/membres/up/2107676425/20071026US1M2M1.gif

Increased M2-M1 was very strong in September and October 2006, which distorts the percentage increases today.
The moving average four weeks smooth variations from week to week. It is more than 8%,
Figure 2: http://s3.archive-host.com/membres/up/2107676425/20071026US2M2M1.gif
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As real GDP growth is inversely proportional to the variation of the free money supply, the GDP growth tends to zero,

Figure 3: http://s3.archive-host.com/membres/up/2107676425/20071026US3FRM.gif

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To revive growth in the United States, the Fed has lowered its base rate to be neutral, at around 4.25%.
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