{"id":2729,"date":"2009-03-17T15:03:13","date_gmt":"2009-03-17T15:03:13","guid":{"rendered":"https:\/\/mmm.9dotdigital.ca\/?p=2729"},"modified":"2025-03-27T15:48:47","modified_gmt":"2025-03-27T15:48:47","slug":"us-corporate-money-trends-healthier-than-in-europe","status":"publish","type":"post","link":"https:\/\/mmm.9dotdigital.ca\/?p=2729","title":{"rendered":"US corporate money trends healthier than in Europe"},"content":{"rendered":"<p>Fourth-quarter US flow of funds accounts, released last week, confirm that broad money is growing at a respectable pace and has picked up in inflation-adjusted terms. Corporate monetary trends are healthier than in the UK and Eurozone, suggesting less pressure for business retrenchment.<\/p>\n<p>The flow of funds accounts permit a more thorough analysis of broad money trends than is possible from weekly and monthly money supply releases. First, the accounts provide information on all the components of the old M3 &ndash; discontinued in 2006. Secondly, an adjusted M3-type measure can be calculated excluding money holdings of quasi-banks, which have been boosted by the financial crisis. Thirdly, this adjusted broad money measure can be broken down between households, non-financial business and financial institutions such as insurance companies and pension funds.*<\/p>\n<p>Annual growth in adjusted broad money stood at 6.5% at the end of 2008, below a 9.9% December rise in the narrower M2 aggregate but above a 3.8% rate of increase of the equivalent UK measure (adjusted M4) &ndash; first chart. The 6.5% expansion was down from 7.6% at the end of the third quarter but a sharp fall in consumer price inflation resulted in real growth accelerating from 2.5% to 6.4%, implying greater monetary support for the economy in 2009 &ndash; second chart.<\/p>\n<p>The 6.5% aggregate increase breaks down into growth of 5.3% for households, 6.2% for non-financial business and 13.9% for financial institutions &ndash; third chart. This suggests less pressure on non-financial business liquidity than in the UK and Eurozone: UK M4 holdings of private non-financial corporations fell by 4.7% in the year to January, while Eurozone non-financial corporate M3 rose by just 1.8% &ndash; fourth chart.<\/p>\n<p><span style=\"font-size: 80%;\">* Definitions:<br \/>M2 = currency, checkable deposits, savings deposits, small time deposits and retail money funds, other than held by government, monetary authority, depository institutions and foreign banks \/ official institutions<br \/>M3 = M2 plus large time deposits, institutional money funds, repurchase agreements and Eurodollar deposits, other than held by government, monetary authority, depository institutions, money funds and foreign banks \/ official institutions (discontinued)<br \/>Flow of funds adjusted broad money = checkable deposits and currency, time and savings deposits, money funds, repurchase agreements and foreign deposits, other than held by government, monetary authority, commercial banks, savings institutions, credit unions, money funds, &ldquo;funding corporations&rdquo; (= quasi-banks) and rest of world<\/span><\/p>\n<p><span style=\"font-size: 80%;\"><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/US-broad-money-0309.jpg?__SQUARESPACE_CACHEVERSION=1237303186720\" alt=\"\" \/><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: 80%;\"><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/US-broad-money-flow-0309.jpg?__SQUARESPACE_CACHEVERSION=1237303201983\" alt=\"\" \/><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: 80%;\"><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/US-broad-money-flow2-0309.jpg?__SQUARESPACE_CACHEVERSION=1237303215757\" alt=\"\" \/><\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: 80%;\"><span class=\"full-image-block ssNonEditable\"><span><img decoding=\"async\" src=\"\/storage\/Business-broad-money-0309.jpg?__SQUARESPACE_CACHEVERSION=1237303234163\" alt=\"\" \/><\/span><\/span><br \/><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fourth-quarter US flow of funds accounts, released last week, confirm that broad money is growing at a respectable pace and has picked up in inflation-adjusted terms. Corporate monetary trends are healthier than in the UK and Eurozone, suggesting less pressure for business retrenchment. The flow of funds accounts permit a more thorough analysis of broad [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2729","post","type-post","status-publish","format-standard","hentry","category-money-moves-markets"],"_links":{"self":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2729","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2729"}],"version-history":[{"count":1,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2729\/revisions"}],"predecessor-version":[{"id":5038,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=\/wp\/v2\/posts\/2729\/revisions\/5038"}],"wp:attachment":[{"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2729"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2729"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mmm.9dotdigital.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2729"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}