Friday, January 17, 2014

MZM Interest vs. Disposable Personal Income

The following chart shows the interest earned on MZM money stock divided by disposable personal income.

Click to enlarge.

Unless one counts cost cutting (and therefore weak employment growth) as a long-term growth strategy, we're apparently fresh out of "genius" ideas.

The chart is especially interesting if one considers how much MZM has grown relative to disposable personal income. It's almost like the more MZM we generate, the harder it is to generate interest off of it. Yeah, it's almost exactly like that. Think Japan.

This coincides well with my long standing belief that it will be increasingly difficult to make money off of money. Those anxiously awaiting higher/juicier real yields over the long-term may be in for serious disappointment, much to the ongoing dismay of Brett Arends at the Wall Street Journal. What a trip down memory lane that link is by the way. 2008, what a year!

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart


TJandTheBear said...

Just fiat returning to its intrinsic value... that of the paper it's printed on.

Stagflationary Mark said...

And yet, hyperinflation is not yet upon us (nor do I expect it any time soon).

Domo Arigato Mr. Roboto.