Take a look at:
Ty Andros at
http://www.financialsense.com/fsu/editorials/andros/2008/0118.html
and
Economicrot at
http://www.slideshare.net/contrarian2day/us-economic-outlook-200811-updated/
Ty Andros is a little bit of a gold-nut so I take his posts with more than just a grain of salt, but he had an interesting chart on Money and Credit creation:
As of October 2007 India's M3 registered a 20%+ YoY growth . For the macro-nically challenged M3 is a broad measure of money supply that is the sum of all currency in circulation, all checking account balances, all deposits - generally all currency, instruments that are considered to be "money".
That piqued my curiosity sufficiently that I had to go and search for trends in money supply. So I sauntered over to http://rbi.org.in/ and looked over their publications to try and get a measure of M3 (a.k.a Broad Money) and try and lay it over the reported CPI (Consumer Price Index) change.
Of course the babus over at the RBI refuse to make things easy for the rest of us, they keep changing the base year for the index every 20 years or so, I had to go back and do all sorts of re-indexing (thank god for excel!) to get a sensible number.
Anywhooo - here's what it looks like:
So while in 2006 M3 grew over 20% (which is what he is showing) in 2007 and 2008 the growth in M3 is 21%+. Unsurprisingly CPI has started moving up (8.7% as of 30.5.2008). Interestingly M3 grew annually at a rate between 15-20% from 1970 onwards. And 1980 to 1989 was a period of dis-inflation (Increase in CPI at a reducing rate), with one year where the CPI actually deflated.
