SAVING RATE Archives - Capital Market Journal

How many forms of Money do exist ? Why Money Supply & Business Cycle Determine Inflation #economy

00:00:42 – What Inflation Really Is (Not Just Price Changes)
Inflation = loss of purchasing power; the intrinsic value of currency diminishes.
00:01:34 – Three Types of Money
Commodity money, fiscal money, financial ...money – and why they all matter.
00:02:58 – Financial Friction Defined (Simplified)
The inefficiency between deposit rates and borrowing rates – the banks' profit margin.
00:03:45 – Agency Costs & Credit Risk
Why banks factor in default risk and how it affects borrowing costs.
00:05:47 – The Toblerone Example: Purchasing Power in Practice
One pound 10 years ago ≠ one pound today – you now need three coins for the same chocolate.
00:08:49 – Affordability & Substitution
When prices rise, consumers switch to cheaper alternatives – that's the real cost of living.
00:09:40 – Credit Creation & The Debt Cycle
Borrowing to consume keeps the system running – but at what cost?
00:11:54 – Bank Reserves: The "Financial" Form of Money
Bank reserves are digital money that never touches the real economy – they settle interbank payments.
00:14:49 – Four Forms of Money (Bank Reserves, Fiscal, Deposits, Cash)
All are "pounds" but serve completely different purposes in the economy.
00:19:43 – Money Supply & Intrinsic Value
More money supply = lower purchasing power; money creation for speculation inflates assets, not just goods.
00:23:44 – Boom & Bust Cycles
Inflating money supply drives stock prices up; when they crash, we're left with unpayable debt.
00:26:04 – Money Supply Destroyed in Asset Bubbles
When house prices or stocks fall, the money used to buy them is effectively "destroyed."
00:27:53 – Prices Almost Never Go Down
Inflation is structural – prices are "sticky" upward; you rarely get a discount.
00:28:54 – Statistical Distributions of Inflation (Not Normal!)
Inflation data is positively skewed with fat tails – not a bell curve.
00:33:25 – Hurst Coefficient & Price Jump Persistence
Price jumps have memory – they persist and happen more often than random chance would suggest.
00:35:43 – Cumulative Price Increases (1989–2026)
CPI total increase = 183% (≈5% per year average); Core CPI = 151% (≈4% per year); Housing services = 327% (≈8.8% per year); Utilities = 447% (≈12.8% per year).
00:40:50 – The 2% Target Is a Myth
The Bank of England's 2% target has never been achieved in 37 years of data.
00:41:24 – Short-Term Shocks Are Increasing in Frequency
Monthly dispersion has crossed above the 12-month average – volatility is rising.
00:43:43 – The Core Equation: GDP Growth vs. Money Supply Growth
If money supply grows faster than GDP, the currency depreciates – that's the engine of inflation.
00:46:35 – The Banks' Profit Equation
Profit = (borrower rate × lending) – (depositor rate × deposits) – agency costs. This requires inflation to work.
00:50:58 – The Government's Fiscal Money & Taxation
Public spending is always designed to be recouped through taxes – it's not "free money."
00:55:12 – Why Private Sector Business Is Better Than Government Spending
Business creates value, jobs, and meaning – government spending always comes with tax strings attached.
00:57:54 – Freedom, Natural Rights, & The State
The state must justify its interference; citizens don't need to justify their rights.
00:59:56 – Fourier Transform & Business Cycle Lengths
Using signal processing to find dominant cycles: CPI cycle ≈18.8 years; energy prices cycle ≈5.4 years.
1:05:38 – Cyclical Forecast: What's Next?
The current trough has bottomed – inflation is expected to rise cyclically into 2028, then turn deflationary.
1:09:50 – Amplitude Spectrum & Harmonic Analysis
Visual breakdown of multiple sine waves (cycles) within inflation data.
1:11:26 – Peak Forecast: August 2028
Second peak in the inflation cycle expected around mid-2028.
1:14:45 – Deflationary Trough After 2028?
After the 2028 peak, the cycle may turn negative – deflation or a crash in asset prices.
1:15:40 – Central Banks Should Buy Bonds at Market Yield
Instead of cutting rates to zero, central banks should support the yield curve by buying bonds at current yields.
1:19:26 – Nowcast Scenarios (Oil Price Shocks)
Moderate oil price spike ($90–100/barrel) → CPI ≈2.6–3.3%; severe spike → CPI could hit 4%.
1:23:32 – Bank of England Research Model (Bruneau & Feifer)
Structural shocks (energy, supply, demand, monetary) – energy shocks have the largest volatility.
1:24:36 – Final Nowcast Summary
Most credible range: CPI 3.0–3.6%; RPI petrol nowcast ≈20% (down from 29%); broader inflation trending toward 3%.
1:25:53 – Credit Creation Data (First Half 2026)
Net consumer credit grew by ~£9–10 billion in H1 2026 – accelerating money supply chasing goods = higher prices.Show More

How many forms of Money do exist ? Why Money Supply & Business Cycle Determine Inflation #economy

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WHAT YOU NEED TO KNOW IF YOU RUN A BUSINESS IN THE UK #economy #econometrics

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Overview forecast of a 40-50% Market Cap Decline in MAG7 Stocks on the US Economy. Implications of declining saving rates

Sep 21, 2024 capitalmarketsjournal

The "Magnificent Seven" (Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia, and Tesla) have a combined market capitalization of approximately $15.76 trillion(Stock…

How many forms of Money do exist ? Why Money Supply & Business Cycle Determine Inflation #economy

Overview forecast of a 40-50% Market Cap Decline in MAG7 Stocks on the US Economy. Implications of declining saving rates

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