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
As real GDP growth is inversely proportional to the variation of the free money supply, the GDP growth tends to zero,
To revive growth in the United States, the Fed has lowered its base rate to be neutral, at around 4.25%.