Friday, July 13, 2012

Inflation

MALAYSIA (From 1973 to 2010)

GDP Growth 9.54% p.a. (Source: WorldBank Data)

However,

M3 (Money Supply) Growth 14.08% (Source: Bank Negara Malaysia)

What does it means?

More money was created than the actual production of goods and services during 1973 to 2010 thus creating INFLATION, the different of over 5% over such a long period of 37 years.



SINGAPORE (From 1982 to 2010)

GDP 11.05% p.a. vs M3 9.66% p.a.

No wonder now S$1 = RM2.45


From 1973 to 2010 at 14.08%, it means 130 times.