Metrics

New metrics need to complement current statistics to put sound monetary policy and financial transparency into practice:

1. in the money supply of a nation:

  • the Cash : Credit ratio or the Cash and the Credit percentage of the total money in circulation
  • the percentage of interest payments of the national debt
  • the amoung of interest-free currency issued, aka M0

2. in the budget of a government:

  • the taxes : borrowing ratio or the percentage of taxes vs the percentage of borrowing in the total budget
  • the percentage of interest payments in the total budget is already a well published figure; but not enough people seem to understand the implications.

3. among the indicators of “big money pictures”:

  • “price inflation” over short, medium and long terms
  • “monetary inflation” as the increase in the supply of M0 (Cash) and M4 (Credit)
  • “monetary purchasing power” as a correlation between price and monetary inflation.

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