20.57% : Singapore M3 slows a tad

This could have been titled : "Do you hear anything?" You could almost hear the screeching of brakes as the Singapore M3 money supply growth rate slowed down, year-on-year, from over 23% to a 20.57% rate as presented in the Sep 2007 edition of the MAS Monthly Statistical Bulletin, for the month of Aug 2007.

The other sounds you hear might include the crash back on 17 Aug 2007, fading into the distance, accompanied by hushed whispers from some property agents about a softening housing market.

Poetic license aside, here's the M3 data (click here if you don't see the table in the IFrame below) :

Singapore's 2007 Q3 GDP growth was 9.4%, and if we take the two figures we do have for Q3 and divide by that, we find that M3 growth is still outpacing GDP growth by a factor of some 2.3x. Which is still inflationary, according to me (and those who follow Austrian economics).

And that is not exactly helped along by high wheat prices, which have doubled in the past year to over US$9 per bushel, driving up the cost of flour, which, you know, is made from wheat, and therefore also driving up the cost of bread, which, you know, is made from flour. A loaf of my favourite Gardenia high-fibre white bread has gone up from $1.70 to $1.80, then $1.90, $1.95 and now it is $2.00. I fully expect it to hit $3.00, then $4.00 some time later on, and patiently await the arrival of the $10 loaf of bread.

While we are talking about inflation, have you noticed the price of crude oil recently? I woke up early in the morning to a new record high in NYMEX crude oil prices - US$90.60 per barrel. Which was promptly broken a few minutes later, and the record (at the time of writing) is now ~~$91.10~~ ~~$91.19~~ ~~$91.29~~ $91.40 (shucks, it keeps hitting new record highs as I am writing this). A hint to motorists reeling from the recent 5 cent petrol price hike (from $1.910 to $1.960 for RON98 and from $1.836 to $1.886 for RON95) : you ain't seen nothing yet. I patiently await $100 oil. And then $150. And then $200.

A friend once asked me, so how do we stop all this inflation? I promptly replied : they have to stop printing money. He said that's not possible. I replied, yes, unfortunately, you are right.

Oil rises to record $91.10

bloomberg.com :

Crude oil rose to a record above $91 a barrel in New York on an unexpected drop in U.S. stockpiles and concern that supply from the Middle East may be disrupted. Inventories last week fell 5.29 million barrels to 316.6 million, the lowest since January, the U.S. Energy Department said. New U.S. sanctions against Iran, warnings of a Turkish assault on Kurdish militants in Iraq and a falling dollar helped push prices higher. Brent futures in London reached a record.

Crude oil for December delivery rose as much as 64 cents, or 0.7%, to $91.10 a barrel in after-hours electronic trading on the New York Mercantile Exchange, the highest since trading began in 1983. It traded at $90.97 at 9:26 a.m. Singapore time. Prices are 51% higher than a year ago. Yesterday the contract jumped $3.36, or 3.9 percent, to $90.46 a barrel, a record close. It was the biggest one-day gain since April 23.

The Bush administration yesterday announced new sanctions against Iran that designate the Iranian Revolutionary Guard Corps as a proliferator of weapons of mass destruction and its Quds force as a supporter of terrorism. The dollar approached a record low against the euro after reports showed U.S. orders for durable goods fell unexpectedly and initial jobless claims were higher than forecast, signaling economic growth may weaken. China yesterday said its economy, the biggest contributor to global growth, expanded 11.5% in the third quarter from a year earlier.

See also :

1. Crude oil reaches record $90.02 after dollar drops against euro (19 Oct 2007)
2. Oil surges to record $88.20 (17 Oct 2007)
3. Oil futures hit new record above $86 (16 Oct 2007)
4. Crude oil hits $84.35 record (15 Oct 2007
5. NYMEX oil hits $84.10 (21 Sep 2007)

(2007-10-26 10:06:13 SGT) [Energy] Permalink

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