some key statistics

7/30/2019 Some Key Statistics

1/25

key statistics

www.nowandfutures.com/key_stats.html[4/05/2013 8:29:14 a.m.]

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Some key statistics as prediction aids

M3b FTTMInternationaldollar flows

Trade&budget

Yieldcurves

Most of worldGDP &money

GDP &moneycreation

UScredit

"Totalmoney"

Globalliquidity

Hardvs.paperassets

Moneysupplylink toinflation

Painmiseryindex

Lmoneysupply

Money supply M1, M2, M3 TMS, Debt & Credit

Inflation Velocity

Unemployment Total Money Supply
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2/25

key statistics


Total credit, with sectors Money supply values

Total money supply, w/deriv. Austrian AMS (TMS1) weekly

M3 is back

We did some sleuthing and data extraction and put M3 back together from various weekly Federal Reserve reports that are still available.

1. The formula we're using has five 9s correlation to the original data back to 1980.2. There is only one missing element that is apparently no longer available (Eurodollars) and an adjustment has been applied to generate it. Its

only about 3% of total M3 so should not have a material effect on the total.

Here is our article on M3b, which details our work and notes the sources for the data. Note that as of Nov. 10, 2006 the Eurodollar estimationformula has changed - see the article for details.

J ohn Williams monthly reconstruction of M3 is here . Ours tends to be more volatile than his, partly because it's weekly and partly because of ourdifferences in calculating the repo and Eurodollar component of M3.

Finally and to put M3 into proper perspective with inflatio n (as measured by CPPI), the M3 and M2 strong inflation link is virtuallyunquestionable . The longer term inflation picture is clear, although M2 shows a pause and likely temporary di s inflation as of 2008.
http://www.nowandfutures.com/glossary.html#money_measureshttp://www.nowandfutures.com/articles/20060426M3b,_repos_&_Fed_watching.htmlhttp://www.shadowstats.com/cgi-bin/sgs/datahttp://www.shadowstats.com/cgi-bin/sgs/datahttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.shadowstats.com/cgi-bin/sgs/datahttp://www.nowandfutures.com/articles/20060426M3b,_repos_&_Fed_watching.htmlhttp://www.nowandfutures.com/glossary.html#money_measures


3/25

key statistics


Certain bloggers are incorrect and have continually avoided these facts and the linked chart.

M3, longer term chart

Same, log chart

M3 consists of M2, institutional money market mutual funds, time deposits in amounts of $100,000 or more, repurchase agreement liabilities of
http://www.nowandfutures.com/images/m3b_long_term_log.pnghttp://www.nowandfutures.com/images/m3b_long_term_log.png


4/25

key statistics


depository institutions (in denominations of $100,000 or more) on U.S. government and federal agency securities, and Eurodollars.

For reference, and as of early 2007, M3 is about $11.5 trillion, M2 about $7.1 trillion, institutional money markets funds about $1.4 trillion, jumboCDs about $1.7 trillion, repos about $.67 trillion ($670 billion) and estimated Eurodollars are about $.61 trillion ($610 billion).11/30/2007 - Note that much o f th e large growth in M3 lately has been i n flows into CDs and Money Market Funds, a normal occurrenceduring financial turmoil. See our financial crisis page for more detail, and a pictu re of t he current level of a U.S. financial crisis.

3/31/2008 - Also s ee our best effort c onstructi on of all Fed activities here . As of today, it shows that the Fed has been backing off on totalmoney creation activiti es on a relative b asis since about December 2007.

4/4/2008 - As of 3/19/2008, we have added the results of th e new Fed TAF, TSLF and PDCF "tools" to ou r M3 reconstructio n, since theyare quite similar to temporary repos (repurchase agreements). Temp repos are p art of the origi nal definit ion of M3. Note that they addvery roughly about 2-2.5% to the annual growth rate.

5/30/08 - Removed TAF, TSLF, etc. from the "regular" M3 weekly chart and now maintain ing i t as ju st a lin k here (M3 with TAF, etc.) .

Important c hange - December 7, 2008

An ad ju stm ent has b een made as o f t hi s w eek t o ac cou nt fo r ch ang es in the Euro do ll ar com ponen t o f M3, taki ng bo th d erivati ves an d t heflight to the dollar into account. It was back dated to September 2008.

Important addit ion - December 15, 2009

12/15/09 - added the rest of the Fed temporary and permanent OMO-like repo programs into our alternate M3 reconstruction here . It now includes TAF, TSLF, PDCF, borrowed reserves, MBS/GSE puchases, Supplemental Financing Program borrowings, adjustments for dollar swap lines, etc. This chart is an attempt to follow the actual original definition of M3 (which includes "repurchase agreement liabilities of depository institutions"),and update the M3 data taking the huge Fed policy changes since 2007 into account. Note also that the dollar swap line adjustment is minor, sincethe Treasury's S .F.P. program provided most of the financing.

Finally and to put M3 into proper perspective with inflation (as measured by CPPI from our work ), the M3 and M2 strong inflation link isvirtually unquestionable . The longer term inflation picture is clear, although M2 shows a pause and likely temporary di s inflation as of 2008. Certain bloggers are incorrect and have continually avoided these facts and the linked chart.

M3 versus MZM, short term chart showing the high similaritiesM3 versus MZM, long term chart showing the similarities

M3b, with the effects f rom the TAF, TSLF, PDCF etc. i ncludedM3b, with the effects from the TAF, TSLF, PDCF etc. includ ed (long term)

M3b, with 13 week rate of c hangeM3b, with 13 week rate of change (long term)

M3 raw data in Excel, weekly since 1900 (interpolated up to 1959), updated monthlySame, except zipped

Fed & Treasury tot al money supply

All majo r Fed operat io ns (plus custodials ), showing the running total of all Fed & Treasury controlled money creation or destructionactions.
http://www.nowandfutures.com/financial_crisis.htmlhttp://www.nowandfutures.com/financial_crisis.htmlhttp://www.nowandfutures.com/fed_watch.html#allhttp://www.nowandfutures.com/fed_watch.html#allhttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/cpi_issues.htmlhttp://www.nowandfutures.com/cpi_issues.htmlhttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc_long_term.pnghttp://www.nowandfutures.com/images/m3b_13week.pnghttp://www.nowandfutures.com/images/m3b_13week_long_term.pnghttp://www.nowandfutures.com/download/m3b.xlshttp://www.nowandfutures.com/download/m3b.ziphttp://www.nowandfutures.com/glossary.html#custodial_accounthttp://www.nowandfutures.com/glossary.html#custodial_accounthttp://www.nowandfutures.com/download/m3b.ziphttp://www.nowandfutures.com/download/m3b.xlshttp://www.nowandfutures.com/images/m3b_13week_long_term.pnghttp://www.nowandfutures.com/images/m3b_13week.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc_long_term.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_mzm_long_term.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m3b_mzm.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply.pnghttp://www.nowandfutures.com/cpi_issues.htmlhttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/images/m3b_with_taf_etc.pnghttp://www.nowandfutures.com/fed_watch.html#allhttp://www.nowandfutures.com/financial_crisis.html


5/25

key statistics


The red line shows the smoothed (via 13 week moving average) annual change rate of all actions, and the black line adds in trading information of the Fed's primary dealers (GSDS). The blue line is the same as the red line, except is not smoothed with a 13 week moving average.

Please see the glossary for all definitions ("helo" drops defined as gov't tax rebates & stimulus checks, etc.)Source for much of data

Same data, long term
http://www.nowandfutures.com/glossary.htmlhttp://www.nowandfutures.com/glossary.htmlhttp://www.federalreserve.gov/releases/h41/http://www.federalreserve.gov/releases/h41/http://www.nowandfutures.com/glossary.html


6/25

key statistics


Same data, short term, di fferent format

L money supply, reconstructed


7/25

key statistics


International d ollar value and t rend

The quick explanation: TIC (Treasury International Capital) flows, when the trade and budget deficits are subtracted, are nicely correlated to the
http://www.nowandfutures.com/glossary.html#tichttp://www.nowandfutures.com/glossary.html#tic


8/25

key statistics


international value of the dollar and show the trend and expected trend quite well.

The in depth explanation: Click here for a full definition of TIC (Treasury International Capital) flows. Basically and simply though, its money thatforeign banks and other official institutions flow to the US - its their investments in US bonds and stocks, and is measured in billions of dollars everymonth.

Two other factors are included in the chart - the US budget deficit (how much more money is being spent than being collected by the USgovernment), and the US trade deficit (how much more money is being spent on stuff being imported into the US from other countries than the USis exporting to other countries).

In order to value a business or company and see what it's worth and how it will do in the future, three of the most important factors are sales,expenses and profit. P rofit is basically sales minus expenses. If we go way out there and assume the entire US is a company, and pretend that the

US dollar is its stock, then we have another way to look at the international value of the dollar. The black line on the chart below is the monthly TIC flow from other countries (income), with both the trade and budget deficits (expenses)subtracted. So you say - "So what?"... well, by doing that we show an income and expense statement for the US dollar itself. Any numbers abovezero on the left hand scale mean a profit and if the number comes in below zero then there has been a loss.

In other words, if we back way off from the dollar and look at it from a 30,000 foot level as the stock of the USA itself, we need to figure out whatwould represent sales and what would represent expenses. We pretend that TIC flows are income and that the combination of the trade and budgetdeficit are the expenses.

Then, TIC minus (trade + budget deficit) represents net profit or loss of the dollar itself. Well, what happens when a company has losses - theirstock price goes down... and the same thing has happened with the international value of the dollar since early 2002. When there was a consistentnet profit between 1997 and 2001, the dollar value rose.

Some may say that what we're doing is way too simple and there's some truth there... but the bottom line is that it does work and does track andhas tracked the value of the dollar for almost 15 years.

Click same chart showing trade deficit only
http://www.nowandfutures.com/glossary.html#tichttp://www.nowandfutures.com/images/tic_trade_usdx.pnghttp://www.nowandfutures.com/images/tic_trade_usdx.pnghttp://www.nowandfutures.com/glossary.html#tic


9/25

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10/25

key statistics


Click below fo r raw TIC only charts

World UK J apan Oilexporters

Russia Net short term flows Net long term flows

MajorHolders

Caribbean KoreaHistorical2002-5

Treasury monthlyraw data

TIC flows, 12 month MA,classes 1

TIC flows, 12 month MA,classes 2

TIC flows,totals

(update June 2007 - some good poi nts about TIC data from Brad Setser here .)

Trade and bud get deficits, t rends
http://www.nowandfutures.com/images/tic_world.pnghttp://www.nowandfutures.com/images/tic_uk.pnghttp://www.nowandfutures.com/images/tic_japan.pnghttp://www.nowandfutures.com/images/tic_oil.pnghttp://www.nowandfutures.com/images/tic_oil.pnghttp://www.nowandfutures.com/images/tic_russia.pnghttp://www.nowandfutures.com/images/tic_total_short_term.pnghttp://www.nowandfutures.com/images/tic_net_long_term.pnghttp://www.nowandfutures.com/images/tic_major_holders.pnghttp://www.nowandfutures.com/images/tic_major_holders.pnghttp://www.nowandfutures.com/images/tic_caribbean.pnghttp://www.nowandfutures.com/images/tic_korea.pnghttp://www.nowandfutures.com/images/tic_historical.pnghttp://www.nowandfutures.com/images/tic_historical.pnghttp://treas.gov/tic/mfh.txthttp://treas.gov/tic/mfh.txthttp://www.nowandfutures.com/images/tic_classes1.pnghttp://www.nowandfutures.com/images/tic_classes1.pnghttp://www.nowandfutures.com/images/tic_classes2.pnghttp://www.nowandfutures.com/images/tic_classes2.pnghttp://www.nowandfutures.com/images/tic_classes3.pnghttp://www.nowandfutures.com/images/tic_classes3.pnghttp://www.rgemonitor.com/blog/setser/198998/http://www.rgemonitor.com/blog/setser/198998/http://www.rgemonitor.com/blog/setser/198998/http://www.nowandfutures.com/images/tic_classes3.pnghttp://www.nowandfutures.com/images/tic_classes3.pnghttp://www.nowandfutures.com/images/tic_classes2.pnghttp://www.nowandfutures.com/images/tic_classes2.pnghttp://www.nowandfutures.com/images/tic_classes1.pnghttp://www.nowandfutures.com/images/tic_classes1.pnghttp://treas.gov/tic/mfh.txthttp://treas.gov/tic/mfh.txthttp://www.nowandfutures.com/images/tic_historical.pnghttp://www.nowandfutures.com/images/tic_historical.pnghttp://www.nowandfutures.com/images/tic_korea.pnghttp://www.nowandfutures.com/images/tic_caribbean.pnghttp://www.nowandfutures.com/images/tic_major_holders.pnghttp://www.nowandfutures.com/images/tic_major_holders.pnghttp://www.nowandfutures.com/images/tic_net_long_term.pnghttp://www.nowandfutures.com/images/tic_total_short_term.pnghttp://www.nowandfutures.com/images/tic_russia.pnghttp://www.nowandfutures.com/images/tic_oil.pnghttp://www.nowandfutures.com/images/tic_oil.pnghttp://www.nowandfutures.com/images/tic_japan.pnghttp://www.nowandfutures.com/images/tic_uk.pnghttp://www.nowandfutures.com/images/tic_world.png


11/25

key statistics


Pain misery index

The simple addition of the unemployment rate to the inflation rate, as measured by CPI.

Note that we have used the U-6 unemployment rate, since the more frequently used U-3 rate data series does not go back to 1900. As of 2007,the average U-3 rate since 1948 was 5.6% and the average U-6 rate since 1947 was 9.5%.


12/25

key statistics


Pain misery index, with housing

Pain misery index, with housing, long termPain misery index, with consumer confidence, long term
http://www.nowandfutures.com/images/pain_misery_housing_short.pnghttp://www.nowandfutures.com/images/pain_misery_housing_index.pnghttp://www.nowandfutures.com/images/pain_misery_conf_index.pnghttp://www.nowandfutures.com/images/pain_misery_conf_index.pnghttp://www.nowandfutures.com/images/pain_misery_housing_index.pnghttp://www.nowandfutures.com/images/pain_misery_housing_short.png


13/25

key statistics


Yield curves & Recessions

Inverted yield curves, depending on their depth and length, are very highly correlated with economic recessions after one year lag.

It's not "different this time". As of early 2006, the probability is about 25% minimum*.

Recessionprobability

Yield spread - 10 year & 3month Treasuries

(burgundy line in chartbelow)

Recession

probability, adjusted**

5% +1.21 30-35%10% +0.76 35-40%

15% +0.46 40-45%

20% +0.22 45-50%

25% +0.02 50-55%

30% -0.17 55-60%

40% -0.50 65-70%

50% -0.82 75-80%

60% -1.13 85-90%

70% -1.46 95-100%

80% -1.85 100%

90% -2.40 100%

Source - "The Yield Curve as a Predictor of U.S. Recessions"

** Note that other research shows the recession risk to be understated by 25-30% or more by the Fed study sourced above, which meansa 50%+ recession chance of o ne in t he U.S. within a year as of mid 2006. Note also that as of late 2006 that recession pro babilities haveincreased greatly in th e Euro area.

Click here for longer term yield curve chart.
http://www.nowandfutures.com/glossary.html#yield_curvehttp://www.newyorkfed.org/research/current_issues/ci2-7.pdfhttp://www.safehaven.com/showarticle.cfm?id=4686http://www.safehaven.com/showarticle.cfm?id=4686http://www.nowandfutures.com/images/yield_curves.pnghttp://www.nowandfutures.com/images/yield_curves.pnghttp://www.safehaven.com/showarticle.cfm?id=4686http://www.newyorkfed.org/research/current_issues/ci2-7.pdfhttp://www.nowandfutures.com/glossary.html#yield_curve


14/25

key statistics


U.S. credit

Changes in the rate of credit creation tend to lead the economy

Credit, short term


15/25

key statistics



16/25

key statistics


Click here for longer term credit chart.

"Total money"

M3 plus credit, recent time
http://www.nowandfutures.com/images/credit_all_long_term.pnghttp://www.nowandfutures.com/images/credit_all_long_term.pnghttp://www.nowandfutures.com/images/credit_all_long_term.png


17/25

key statistics


M3 plus credit, longer term chart

A shorter term chart showing M3 plus credit, plus US derivatives , value adjusted by the Philadelphia Banking Index since its peak in 2007 , andhere for the same chart but without the Banking Index adjustment.

M3 plus credit plus all government debt , short term

Add in addit ional mon etization
http://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.pnghttp://www.nowandfutures.com/images/m3_credit_derivatives_bkx_adj.png


18/25

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19/25

key statistics


M3 plus credit plus all government debt , longer term charts


20/25

key statistics


Closeup of M3, credit and gov't debt - 1920-1940

Of course there is some minimal amount of double counting when combining M3 with credit and government debt. But the relative relationshipsbetween them stays quite similar over the years, and the amounts are trivial especially when viewing them on an annual change rate basis . AlsoM3, literally by definition, contains no credit measures at all.Anyone who believes otherwise is welcome to prove it with actual facts and rigorous analysis, not just links to some Austrian theories or blue skyanalysis.
http://www.nowandfutures.com/images/m3_plus_credit_and_debt1920-40.pnghttp://www.nowandfutures.com/images/m3_plus_credit_and_debt1920-40.png


21/25

key statistics


Most of world GDP & money creation (US, Euro area, Japan, China)

Short term

Click here for longer term chart.

GDP & money creation & lags

Changes in the rate of money creation are clearly reflected in GDP , after a time lag.
http://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/images/world_gdp_money_long_term1.pnghttp://www.nowandfutures.com/images/world_gdp_money_long_term1.pnghttp://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/images/world_gdp_money_long_term1.pnghttp://www.nowandfutures.com/glossary.html#gdp


22/25

key statistics


See money and lags for more data.

For the technically inclined, the GDP projection is based on a lagged rate of change of M3 and volatility plus an Excel forecast of bank credit withdebt deflation.

Money supply creation and the inflation link

Click here for the same chart, except going back to 1875.Click here for the same chart, except with credit instead of m2, and since 1900.
http://www.nowandfutures.com/money_and_lags.htmlhttp://www.nowandfutures.com/images/m2m3_cpi_money_supply1875.pnghttp://www.nowandfutures.com/images/m3_credit_cpi_money_supply_and_inflation_link.pnghttp://www.nowandfutures.com/images/m3_credit_cpi_money_supply_and_inflation_link.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_supply1875.pnghttp://www.nowandfutures.com/money_and_lags.html


23/25

key statistics


Finally, the broadest & fullest picture of money supply we havewhich includes M3 & credit & gov't debt, since 1900.

Global Liquidity

Same chart, except with the dollar index instead of gold

Annual percentage rate of change in the combination of a US money measure called the monetary base plus the total change rate of reserves of the main Central Banks of the world.

It basically measures how fast the central banks are adding liquidity by measuring the growth rate of their own reserves at the IMF, then adding themonetary base to overweight the US. Source: IMF & Fed. Note also that the reserves data on which the charts are based do not include all CentralBanks. China, for example, does not report data to the IMF.

A no te o n thi s g lobal li qu id ity ch art:We've had a few question the correlation lag between the two lines in both the late '70s and recently. They ask, if the correlation is supposed to beso good then why was there a 2+year lag in both cases between the peak in liqudity and the peak in gold. Our answer is related to sentimentbased on having wrong facts. Both in the late '70s and recently, most people are not aware or do not believe that inflation is running much higherthan what their governments say. When they do start to truly believe that inflation is significant, gold and many other commodities will move muchhigher.

Be very cautious about extrapolating that gold prices are due to fall greatly *and* on the longer term. We recommend that you notice thatglobal liquidity peaked in 1977 and gold didn't peak until 1980, it's still expanding at over 10% even though the current trend is down, and also thatthere are strong indications that global liquidity is only temporarily dropping (see GDP and money creation above)(written and as of May 2006).
http://www.nowandfutures.com/images/m2m3_cpi_money_debt_credit.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_debt_credit.pnghttp://www.nowandfutures.com/glossary.html#global_liquidityhttp://www.nowandfutures.com/images/global_liquidity_cofer_base2.pnghttp://www.nowandfutures.com/glossary.html#basehttp://www.nowandfutures.com/glossary.html#basehttp://www.nowandfutures.com/glossary.html#reserveshttp://www.nowandfutures.com/glossary.html#central_bankhttp://www.nowandfutures.com/glossary.html#central_bankhttp://www.nowandfutures.com/glossary.html#imfhttp://www.nowandfutures.com/glossary.html#imfhttp://www.nowandfutures.com/glossary.html#sentimenthttp://www.nowandfutures.com/glossary.html#sentimenthttp://www.nowandfutures.com/glossary.html#imfhttp://www.nowandfutures.com/glossary.html#central_bankhttp://www.nowandfutures.com/glossary.html#reserveshttp://www.nowandfutures.com/glossary.html#basehttp://www.nowandfutures.com/images/global_liquidity_cofer_base2.pnghttp://www.nowandfutures.com/glossary.html#global_liquidityhttp://www.nowandfutures.com/images/m2m3_cpi_money_debt_credit.pnghttp://www.nowandfutures.com/images/m2m3_cpi_money_debt_credit.png


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Annual percentage rate of change obtained by adding the GDP growth rate of the G7 countries , adding the same growth rate percentage data fromthe global liquidity graph above this one, and then subtracting the average of the interst rates of the 10 year Treasury bond and the 10 year Eurobond.

In other words, we're measuring the production rate of goods and services of the majority of the Western world, adding in excess money creationvia the measurement of central banking reserves growth, and then subtracting an average interest rate to account for the cost of the moneycreated and used. Source data is from the IMF, the ECB, & the Federal Reserve.

10 year Treasury bond & Nikkei The correlation between the 10 year T-Bond interest rate and the Nikkei 225 Japanese stock index is unmistakeable since 1990, but less thangood before 1990. Click here for chart.

Stocks vs. hard assets, commodit ies and US housing

(also known as " The One Chart to Rule Them Al l" )

For the last 200+ years, there has been an average 16 year long cycle where investment returns move between paper and hard asset leadership.Below we show four ratios: the Dow divided by gold, the Dow divided by 3.5 barrels of oil,the same with the Commodity Research Bureau index,and then the U.S . median house price in gold (times .05 to fit on the scale).
http://www.nowandfutures.com/glossary.html#gdphttp://www.nowandfutures.com/glossary.html#g7http://www.nowandfutures.com/glossary.html#g7http://www.nowandfutures.com/glossary.html#reserveshttp://www.nowandfutures.com/glossary.html#reserveshttp://www.nowandfutures.com/images/nikkei_10_year_bond.pnghttp://en.wikipedia.org/wiki/Commodity_Research_Bureauhttp://en.wikipedia.org/wiki/Commodity_Research_Bureauhttp://en.wikipedia.org/wiki/Commodity_Research_Bureauhttp://www.nowandfutures.com/images/nikkei_10_year_bond.pnghttp://www.nowandfutures.com/glossary.html#reserveshttp://www.nowandfutures.com/glossary.html#g7http://www.nowandfutures.com/glossary.html#gdp


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Click here for the same chart, but with the left hand scale reversed from the above. We've found that some prefer it that way.Click here for the same chart, but only covering the period since 1966. Recent details are easier to see on it.Click here for the same chart, but only covering the period since 2000. Recent details are mu ch easier to see on i t.

Click here for the same chart, but covering the full period since 1800 with as much data as we could find, and here for the same picturewith a reversed y axis.

Note 1: The CRB data only goes back to 1956 - data before that has been extracted fro m various sources and merged in as best we co uld.It may have significant statistical problems and not be as reliable as we would like. Use it at your own risk. Note also that we switched tothe CCI (Continu ous Commodity Index) version of the CRB index in Au gust 2006 when the original CRB index was changed, so thathistorical comparisons remain valid.

Note 2: The housing price data on which the chart was based has been extrapolated and adjusted from the long term Shiller Home PriceIndex .

IMPORTANT!

What the lawyers make us say (disclaimer) :The above is presented for educational and/or entertainment purposes only. Under no circumstancesshould it be mistaken for professional investment advice, nor is it at all intended to be taken as such. The commentary and other contents simplyreflect the opinion of the authors alone on the current and future status of the markets and various economies. It is subject to error and changewithout notice.The presence of a link to a website does not indicate approval or endorsement of that web site or any services, products, or opinionsthat may be offered by them.

Neither the information nor any opinion expressed constitutes a solicitation to buy or sell any securities nor investments. Do NOT ever purchase

any security or investment without doing your own and sufficient research. None of the parties adding to or affecting the content of nowandfutures.com in any way shall have any liability for any loss sustained by anyone who has relied on the information contained herein. NeitherNowandfutures.com nor any of its principals or contributors are under any obligation to update or keep current the information contained herein. Theprincipals and related parties of nowandfutures.com may at times have positions in the securities or investments referred to and may makepurchases or sales of these securities and investments while this site is live. The analysis contained is based on both technical and fundamentalresearch. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.

Lastly, the predictions and forecasts shown on this site are all based on publicly available data from official government sources, the FederalReserve System , other central banks and international organizations like the IMF.

Disclosure We accept no advertising or compensation, and have no material connection to any products, brands, topics or companies mentionedanywhere on the site.

Not copyright 2013 NowAndFutures.com , but please show us as source when we are (not required).
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some key statistics

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