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

[tungle]

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).

[hkc]

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

[rntn]

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]

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.

[incomingpain]

You're looking for money supply numbers and balance sheets on central banks.

https://fred.stlouisfed.org/series/M1SL

M1 is true currency: 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

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.

[bb88]

> If the democrats can just keep raising the ceiling, it's not a ceiling. More of an umbrella i guess?

I'm pretty sure that goes both ways depending upon who's in power at the time. Republicans love pork barrel spending just as much as democrats do.

https://www.nytimes.com/2004/11/18/politics/senate-backs-hig...

The deficit rose $7.8T while Trump was president, yet the democrats get blamed for raising the debt ceiling.

https://www.washingtonpost.com/business/2021/01/14/trump-leg...

[incomingpain]

>I'm pretty sure that goes both ways depending upon who's in power at the time. Republicans love pork barrel spending just as much as democrats do.

Absolutely. Deficit spending is the problem but moving the ceiling is what matters. The point of the ceiling to force politicians to be fiscally responsible.

If neither of them could move the ceiling. Then when they hit the ceiling, they now have to start figuring out what spending to cut. They never do that.

>The deficit rose $7.8T while Trump was president, yet the democrats get blamed for raising the debt ceiling.

Politicians sure like spending. Nobody wants to be the politician who cuts and takes blame for the cuts. Then your opponents get back into power after you were fiscally responsible and get to spend and take credit? Why would you fall for that trap? Keep on spending!

Moving the debt ceiling even temporarily should be death to a political party.

Luckily, in the USA this does seem to be the case.

[PolygonSheep]

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]

>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/pred...

They do it by yield curve.

https://www.incrediblecharts.com/economy/yield_curve.php

Here's the live data: 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.

[larsrc]

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]

sure, but I need to know how much more recently.

[Smithy1]

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.

[ganzuul]

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]

Do you have an on-topic answer?

[jauco]

Why should everyone post? Maybe they just save articles?