Paul Brodsky
QBAMCO
BCA Investment ConferenceThe Plaza Hotel, New YorkOctober 25, 2010
QBAMCO 2
0%200%400%600%800%1000%1200%1400%1600%1800%Mar-70 Mar-74 Mar-78 Mar-82 Mar-86 Mar-90 Mar-94 Mar-98 Mar-02 Mar-06
Sources: St. Louis Fed; QBAMCO
•
From 1994 to 2006, M3, which was the only monetaryaggregate that included overnight repurchaseagreements among banks, grew 142% from $4.3 trillionto $10.4 trillion (11.8% annually). (The Fed stoppedpublishing M3 in March 2006.)
•
US per capita output grew 65% over the same period(5.4% annually).
•
The US economy seems to have needed a massivecredit build merely to maintain trend level nominal outputgrowth .
US M3 growthUS GDP/Capita growth
QBAMCO 3
199420062010Increase
(2006 –2010)
Ratio toMonetaryBase
USD Monetary Base $431 $842 $1,972 +134.2%Total Public DebtOutstanding (Treasury)$4,692 $8,507 $13,562 +59.4% 6.9 : 1US GDP $7,248 $13,612 $14,651* 7.6%Outstanding USD-denominated Claims* $70,000 * 35.5 : 1
QB Asset Management Company,LLC
. All figures are in billions and are as of September in respective years. GDP Increase assumes 20103Q 2% annualized increase.
Sources:
USD Monetary Base - St. Louis Fed (www.research.stlouisfed.org/fred2/series/BASE/downloaddata?cid=124); Total Public DebtOutstanding-TreasuryDirect(www.treasurydirect.gov/NP/NPGateway); USD GDP - St. Louis Fed(www.research.stlouisfed.org/fred2/series/BASE/downloaddata?cid=124); Outstanding USD-denominated Claims have been estimated andincludes all public and private sector debt outstanding (Treasury, mortgage, auto, consumer, corporate, state, and municipal debt, as well asunfunded federal obligations in current dollars.
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