Monetary Policy and Central Banking in the Post Crisis Environment
Is Monetary Policy Causing Commodity Inflation?
Central Bank of Chile and Global Interdependence Center Santiago, Chile Jan 17, 2011 Past Performance Is Not Necessarily Indicative Of Future Results.
0
US M2 vs CHINA M2 11%
30%
9%
26%
7%
22%
5%
18%
3%
14%
1%
10%
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Sources: US Federal Reserve and The People’s Bank of China
Jan-06 US M2
Jan-07
Jan-08
CHINA M2
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-09
Jan-10
Nov 2010 1
CHINA YUAN IN US DOLLARS 0.16
0.15
0.15
0.14
0.14
0.13
0.13
0.12 Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Source: Bloomberg BGN
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-09
Jan-10
Jan-11
Dec 2010 2
TOTAL PCE DEFLATOR VS CORE PCE DEFLATOR 3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
Jan-83
Jan-87
Jan-91
Source: Bureau of Economic Analysis
Jan-95
TOTAL
Jan-99
Jan-03
CORE
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-07
Jan-11 Nov-10
3
FOOD CPI VS ENERGY CPI
3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO 30.0%
7.0%
6.0% 20.0%
5.0%
10.0% 4.0%
0.0%
3.0%
2.0% -10.0%
1.0%
-20.0% 0.0%
-30.0% Jan-82
-1.0% Jan-86
Jan-90
Source: Bureau of Labor Statistics
Jan-94
ENERGY
Jan-98
Jan-02
FOOD
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-06
Jan-10
Nov-10 4
TOTAL PCE DEFLATOR - CORE PCE DEFLATOR 3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-2.5% Jan-83
Jan-87
Jan-91
Jan-95
Jan-99
Jan-03
Source: Bureau of Economic Analysis
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-07
Jan-11 Nov-10
5
GDP DEFLATOR VS CORE PCE DEFLATOR CURR QUARTER %CH FROM YEAR AGO
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0% Mar-00
Mar-01
Mar-02
Mar-03
Source: Bureau of Economic Analysis
Mar-04
Mar-05
GDP DEFLATOR
Mar-06
Mar-07
CORE PCE DEFLATOR
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-08
Mar-09
Mar-10
Q3 2010 6
CRUDE OIL IN US$ Dollars per barrel
160
140
120
100
80
60
40
20 1/6/2006
1/6/2007
1/6/2008
1/6/2009
Source: Bloomberg
Past Performance Is Not Necessarily Indicative Of Future Results.
1/6/2010
Dec-31-2010 7
CORE CPI MEASURES
3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO 6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
-3.0%
-4.0% Jan-00
Jan-02 Source: Bureau of Labor Statistics
Jan-04
CORE SERVICES CPI
Jan-06
Jan-08
CORE CPI COMMODITIES
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-10
Nov-2010 8
US SINGLE FAMILY HOUSING STARTS VS US CAR SALES MONTHLY, MILLIONS OF UNITS
2.3
22
2.1 20 1.9 18
1.7
1.5 16 1.3 14 1.1
0.9
12
0.7 10 0.5
0.3 Jan-00
8 Jan-02
Jan-04
Sources: US Census Bureau and Bureau of Economic Analysis
Jan-06
Jan-08
US Single Family Housing Starts
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-10 US Car Sales
Nov-2010 9
CORN IN US$
Dollars per bushel
7.5
6.5
5.5
4.5
3.5
2.5
1.5 1/6/2006
1/6/2007
1/6/2008
1/6/2009
Source: United Stated Department of Agriculture
Past Performance Is Not Necessarily Indicative Of Future Results.
1/6/2010
Dec-31-2010 10
GLOBAL GRAIN STOCKS: DAYS OF CONSUMPTION 140
120
100
80
60
40
20
0
Sources; Historical Data: USDA 10/11 Projection: McVean Trading & Investments
COARSE GRAINS
Past Performance Is Not Necessarily Indicative Of Future Results.
WHEAT
RICE 11
US PRODUCTION OF TOTAL RENEWABLE FUEL Billions of Gallons
38.00
33.00
28.00
23.00
18.00
13.00
8.00
3.00 2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: US Department of Energy
Past Performance Is Not Necessarily Indicative Of Future Results.
2018
2019
2020
2021
2022
Actual through: 2010 Forecast through: 2022 12
CHINESE GDP
CURRENT QUARTER %CH FROM YEAR AGO 30
25
20
15
10
5
0 Mar-02
Mar-03
Mar-04
Mar-05
Source: National Bureau of Statistics of China
Mar-06
Mar-07 REAL GDP
Mar-08
Mar-09
NOMINAL GDP IN YUAN
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-10
Q3 2010 13
CHINA TOTAL BANK LOANS VS CHINA M2
3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO
35%
30%
25%
20%
15%
10%
5%
0% 1/1/2000
1/1/2002
1/1/2004
Sources: China Economic Information Network and The People’s Bank of China
1/1/2006 BANK LOANS
Past Performance Is Not Necessarily Indicative Of Future Results.
1/1/2008 M2
1/1/2010
Nov 2010 14
CHINA EXPORTS VS IMPORTS
3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO 80%
60%
40%
20%
0%
-20%
-40% Jan-00
Jan-01
Jan-02
Jan-03
Source: China Statistics Monthly
Jan-04
Jan-05 EXPORTS
Jan-06
Jan-07
Jan-08
IMPORTS
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-09
Jan-10
Jan-11
Dec-10 15
CHINA RAILROAD FREIGHT VS ELECTRICITY PRODUCION 3 MONTH AVERAGE %CH FROM 3 MONTH AVERAGE YEAR AGO
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0% 1/1/2000
1/1/2002
1/1/2004
Sources: China Economic Information Network
1/1/2006 RAIL
1/1/2008 ELECTRICITY PRODUCTION
Past Performance Is Not Necessarily Indicative Of Future Results.
1/1/2010
Oct 2010 16
COPPER IN US$
Dollars per metric ton
10000
9000
8000
7000
6000
5000
4000
3000
2000 1/6/2006
1/6/2007
1/6/2008
1/6/2009
Source: London Metal Exchange
Past Performance Is Not Necessarily Indicative Of Future Results.
1/6/2010
Dec-31-2010 17
COTTON IN US$ Dollars per Pound
160
140
120
100
80
60
40 1/6/2006
1/6/2007
1/6/2008
1/6/2009
Source: United Stated Department of Agriculture
Past Performance Is Not Necessarily Indicative Of Future Results.
1/6/2010
Dec-31-2010 18
GOLD IN US$
Dollars per ounce
1600
1400
1200
1000
800
600
400 1/6/2006
1/6/2007
1/6/2008
1/6/2009
Source: Bloomberg BGN
Past Performance Is Not Necessarily Indicative Of Future Results.
1/6/2010
Dec-31-2010 19