5 ms·

Ask HN: How to check if a central bank is printing money

4 points by tungle 4y ago

Is there anyway I can check if the central bank of my country is printing money out of thin air? is there a world-bank or IMF records or something similar where I can track? The country is not a Western-style democracy, so information may be not so transparent (Currently they just announced some COVID relief packages, but I don't know where the money come from).

rntn 4y ago
https://www.imf.org/en/Publications/FM/Issues/2021/10/13/fiscal-monitor-october-2021 https://www.imf.org/en/Publications/FM/Issues/2021/10/13/fis... Downloads there include a 7+ mb .xlsx spreadsheet with extensive analysis of most countries' fiscal policies by the IMF. The April 2022 report will be out soon..
einszwei 4y ago
It would require you to study the financial statements of your central bank and yearly budget of your government to see how they are financing themselves.
ganzuul 4y ago
You sat on this account for 3 years? Edit: Why not just explain instead of complain? Edit2: You people are insane and I'm quitting HN.
- tungle 4y ago
  Do you have an on-topic answer?
- jauco 4y ago
  Why should everyone post? Maybe they just save articles?
incomingpain 4y ago
You're looking for money supply numbers and balance sheets on central banks. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL M1 is true currency: https://www.investopedia.com/terms/m/m1.asp https://www.investopedia.com/terms/m/m1.asp You will notice the graph suddenly changed recently. 4 trillion to 20 trillion is 500% increase in currency. Theoretically there's 500% inflation coming, obviously not set in stone. They can still pull the money back at the expense of a severe recession at minimum. Another factor is that balance sheet. https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL That flat line before the financial crisis is normal, not good, not bad. We could go into how the debt ceiling functions but it's unimportant. If the democrats can just keep raising the ceiling, it's not a ceiling. More of an umbrella i guess? Effectively what happened in 2009 was that the USA federal government was officially bankrupt. But there's no such thing as bankruptcy for them. Plus who will make the decision to go bankrupt/default? It's retirees and veterans who suddenly have to go back to work... you lose the next election in a landslide. So you start the printing presses and hope you can print enough money before your credit rating drops to the point that refinancing the debt will be impossible.
- PolygonSheep 4y ago
  How can we tell if Zimbabwe/Venezuela style hyperinflation is a real risk in the US? I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner. Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry?
  - incomingpain 4y ago
    >How can we tell if Zimbabwe/Venezuela style hyperinflation is a real risk in the US? I dont believe that will happen. As you know hyperinflation is >50%/month. At the current 500%. It would be over in 10 months. That's moving awfully fast for the economy. No if hyperinflation does happen, it will be something else that sparks this. That something else could be happening right now and won't be reported on because everyone who knows will be busy GTFO. >I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner. 10 years ago is 2010. Middle of financial crisis where this all starts. They are correct in a book smart point of view. In practice we know say X,Y,Z happen and therefore A, B, C happen later. We don't have exact science saying it happens exactly 93 days, 4 hours later. People also having read the zerohedge criticism will look at the problem again and may make a change that in their estimation fixes the problem. Perhaps only delaying the inevitable. When the tires hit the road... things are murkier. >Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry? https://www.federalreserve.gov/econres/notes/feds-notes/predicting-future-recessions-20190506.htm https://www.federalreserve.gov/econres/notes/feds-notes/pred... They do it by yield curve. https://www.incrediblecharts.com/economy/yield_curve.php https://www.incrediblecharts.com/economy/yield_curve.php Here's the live data: https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page https://www.marketwatch.com/investing/bond/tmubmusd10y?count... Basically if a longer maturity tbill provides less return than a shorter tbill; financially it makes no sense to choose less money. The prediction suggests people are making decisions, money/mouth, expecting bad things to happen soon. While yes, there is an inversion. It's between the 3 and 10 year. So I don't expect this predicting disaster this year.
hkc 4y ago
I am not sure about your country but in India, RBI publishes Fortnightly reports [1] which provide various data on money supply. It provides data on "Currency with the public" which doesn't reveals much but it does give a rough idea of currency in circulation. Try to find something similar for your country. [1]. https://rbi.org.in/Scripts/Data_MSupply.aspx https://rbi.org.in/Scripts/Data_MSupply.aspx
larsrc 4y ago
These days, pretty much all money-printing is effectively out of thin air. Few if any have a gold standard or similar backing their currencies. So it's down to trust in the economy. (Not that gold really has intrinsic value, but everybody seem to love shiny rocks:)
- tungle 4y ago
  sure, but I need to know how much more recently.
Smithy1 4y ago
I enjoyed the discussion. Can anyone tell me where I can track the monthly CB balance sheet numbers for ECB, Japan, US and China? The Fed does not seem to publish them.

4 points by tungle 4y ago

rntn 4y ago

https://www.imf.org/en/Publications/FM/Issues/2021/10/13/fiscal-monitor-october-2021 https://www.imf.org/en/Publications/FM/Issues/2021/10/13/fis... Downloads there include a 7+ mb .xlsx spreadsheet with extensive analysis of most countries' fiscal policies by the IMF. The April 2022 report will be out soon..

einszwei 4y ago

It would require you to study the financial statements of your central bank and yearly budget of your government to see how they are financing themselves.

ganzuul 4y ago

You sat on this account for 3 years? Edit: Why not just explain instead of complain? Edit2: You people are insane and I'm quitting HN.

tungle 4y ago
Do you have an on-topic answer?
jauco 4y ago
Why should everyone post? Maybe they just save articles?

incomingpain 4y ago

You're looking for money supply numbers and balance sheets on central banks. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL M1 is true currency: https://www.investopedia.com/terms/m/m1.asp https://www.investopedia.com/terms/m/m1.asp You will notice the graph suddenly changed recently. 4 trillion to 20 trillion is 500% increase in currency. Theoretically there's 500% inflation coming, obviously not set in stone. They can still pull the money back at the expense of a severe recession at minimum. Another factor is that balance sheet. https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL That flat line before the financial crisis is normal, not good, not bad. We could go into how the debt ceiling functions but it's unimportant. If the democrats can just keep raising the ceiling, it's not a ceiling. More of an umbrella i guess? Effectively what happened in 2009 was that the USA federal government was officially bankrupt. But there's no such thing as bankruptcy for them. Plus who will make the decision to go bankrupt/default? It's retirees and veterans who suddenly have to go back to work... you lose the next election in a landslide. So you start the printing presses and hope you can print enough money before your credit rating drops to the point that refinancing the debt will be impossible.

PolygonSheep 4y ago
How can we tell if Zimbabwe/Venezuela style hyperinflation is a real risk in the US? I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner. Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry?
- incomingpain 4y ago
  >How can we tell if Zimbabwe/Venezuela style hyperinflation is a real risk in the US? I dont believe that will happen. As you know hyperinflation is >50%/month. At the current 500%. It would be over in 10 months. That's moving awfully fast for the economy. No if hyperinflation does happen, it will be something else that sparks this. That something else could be happening right now and won't be reported on because everyone who knows will be busy GTFO. >I used to read ZeroHedge 10 years ago where every day they would point to an increase in the Fed balance sheet/money supply/deficit/debt to GDP ratio/something and proclaim hyperinflation and the end of the world as we know it is right around the corner. 10 years ago is 2010. Middle of financial crisis where this all starts. They are correct in a book smart point of view. In practice we know say X,Y,Z happen and therefore A, B, C happen later. We don't have exact science saying it happens exactly 93 days, 4 hours later. People also having read the zerohedge criticism will look at the problem again and may make a change that in their estimation fixes the problem. Perhaps only delaying the inevitable. When the tires hit the road... things are murkier. >Obviously that didn't happen (and after a few missed predictions, I abandoned all "doomer" media). But what are the warning signs that stuff is seriously going off the rails and it's really time to worry? https://www.federalreserve.gov/econres/notes/feds-notes/predicting-future-recessions-20190506.htm https://www.federalreserve.gov/econres/notes/feds-notes/pred... They do it by yield curve. https://www.incrediblecharts.com/economy/yield_curve.php https://www.incrediblecharts.com/economy/yield_curve.php Here's the live data: https://www.marketwatch.com/investing/bond/tmubmusd10y?countrycode=bx&mod=home-page https://www.marketwatch.com/investing/bond/tmubmusd10y?count... Basically if a longer maturity tbill provides less return than a shorter tbill; financially it makes no sense to choose less money. The prediction suggests people are making decisions, money/mouth, expecting bad things to happen soon. While yes, there is an inversion. It's between the 3 and 10 year. So I don't expect this predicting disaster this year.

hkc 4y ago

I am not sure about your country but in India, RBI publishes Fortnightly reports [1] which provide various data on money supply. It provides data on "Currency with the public" which doesn't reveals much but it does give a rough idea of currency in circulation. Try to find something similar for your country. [1]. https://rbi.org.in/Scripts/Data_MSupply.aspx https://rbi.org.in/Scripts/Data_MSupply.aspx

larsrc 4y ago

These days, pretty much all money-printing is effectively out of thin air. Few if any have a gold standard or similar backing their currencies. So it's down to trust in the economy. (Not that gold really has intrinsic value, but everybody seem to love shiny rocks:)

tungle 4y ago
sure, but I need to know how much more recently.

Smithy1 4y ago

I enjoyed the discussion. Can anyone tell me where I can track the monthly CB balance sheet numbers for ECB, Japan, US and China? The Fed does not seem to publish them.