This was the period of Demand/Pull Inflation To Satisfy Hedge Buying To Beat Inflation 42 30 The Pleasure Of Statistical Narcissism THE WALL STREET JOURNAL, Wednesday, May 23, 1973 Monetary Illusion? The Fed Seems to Restrain the Economy, But Some Analysts Say That It Isn't So By LINIFY H CLARK JR THEATRE JONAL NEW YORK-I am cnvinced that our hatLe tourbiration ar1 cabs the bis for a lasting presents can be won Pruder: more. lary and fiscal policies are essential to act lev Ing that objective and grs are multiplying that such po ces will in fact he flawed The pare of more ar: expansion has moderated in recent morin Tha's w. 1: Arthur RTs chairman of the Fed Resene Bar1. told the House Ratk ing Committee at the end of this sears first quarer le certainly true that the money sup piy-currency pics checking accounts has been praire more slowly The rate fell from an average of 74 in 1972 to 48% in the first queer and growth has canünued to be mod Sindlinger Note: When This 1973 To Anyone Seasonally Adjusted Policy Is Was But Some This BURNS DEFENDS Denies Friedman Charge By SOMA GOLDEN The chairman of the Federal] Reserve Board, Dr. Arthur F. Burns, denied yesterday that] the central bank deserved major blame for the country's record-breaking inflation rate. He rejected the charge of a Federal Reserve's critic, Prof. Milton Friedman of the University of Chicago, who said earlier this week that loose monetary policy was the major cause of price pressures now sweeping| through the economy. Appearing yesterday before the Joint Economic Committee of Congress, Dr. Burns said he did not wish to debate his "old friend" Professor Friedman on the virtues of recent Fed policy. But he insisted that big Federal deficits of recent years had done much to generate inflation-and he hinted that monetary policy alone was not to blame. Burns Assures Congress on Monetary Plans Nixon's Economics Chief Sees Inflation Rate Fed's M1 For 1973 & What You Were Reading 31 The Fed Is Tightening Up Money Supplies Again By EDWIN L. DALE Jr. Special to The New York Times WASHINGTON, Sept. 2 — Although Government economists are as aware as their fellows in business, banking and the universities of the hazards of forecasting the business outlook this summer, in general they agree with what top officials are saying publicly-that the present boom will be terminated by a "soft landing" and not a recession. This means that the rate of "real" growth in the economy. as measured by the gross national product, would drop over the next year and more to a rate of about 4 per cent-a lit tle lower in some periods, and some perhaps a little higher. At the peak of the boom the growth rate was 8 per cent. several months he'ore the THE MONEY markers are the first to Shar The stock market in react Stock prices began shifting Banks are finding they still The banks will be fading Fed Data Shows In Nation's Banks More-Than-11% Rates Offered Federal Funds Rate 10.52% By a WALL STREET JOURNAL Stag Reporter NEW YORK-The nation's banks were hard put for funds in the week ended Wednesday, weekly statistics issued by the New York Federal Reserve Bank indicated. The strain was underscored yesterday as banks offered rates of slightly more than 11'; to raise funds through the "sale" of 90-day ne gotiable certificates of deposit. Even at that high rate, banks had little success in peddling Stein to Quit by March 1 Slowdown Is Here L Stud Reporter rt Stein, chairCouncil of Eco is to r 32 Economists Lose By EDWC L. DALE Jr. "I am constantly amazed at their ineptitude." That remark by an economist who works for a Wisconsin bank referred to the Federal Reserve System. It was made last week ere at the annual meeting of the National Association of Business Economists and illustrates, in somewhat exaggerated form, what appears to be an important change in attitude about the nation's central bank among men and women who traditionally held the Federal Reserve in high regard. Of course, that senument was not unanimous. But among the many poll-type statistics that emerged from last week's meeting was one giving a quantitative picture of the swing in opinion. The 415 business economists in the poll were asked, "How would you rate monetary policy over the past year?" These were Excellent-1.4 per cent. No opinion 3.4 per cent. The Pleasure Of Statistical Narcissism This article, printed in late 1973 from the New York Times, reports upon an "economist survey" on Fed monetary policy over the past year. The results of this member survey were quite interesting, as will be observed. 1973 from our observations was the year for the real development of the Fed Watcher's Cult. Dr. Burns had been wrongfully accused during 1972 of making the money supply grow to elect President Nixon. Sindlinger's data says this is not so, the money supply 140 Next booklet in this series covers the Fed's M1 as it was wrong when seasonally adjusted for 1974. 135 Preliminary SINDLINGER & COMPANY, INC. Media, Pennsylvania 19063 Telephone: 215-565-2800 130 Ll FMAMJJASONDJ FM 1972 '73 The New York Times/April 27, 1973 34 Book I The Pleasure Of Statistical Narcissism Chapter IV Fed's M1 1974 This is Sindlinger's third booklet of a series to illustrate the error and absurdity of decision making based upon "official" seasonally-adjusted figures. The subject for this issue is the Federal Reserve Board's M1 for the year 1973 as originally reported and later revised. The year 1974 was marked by recession and double-digit inflation. The economy was not really bad in the first half of 1974, but slid in the second half, especially after the November auto layoffs started. Inflation roared throughout, following the November 1973 oil-price rise. As was explained on page 19, Chapter III, prior booklet, the recession was forecast by Sindlinger to start during late 1974, and this forecast was first made in April 1973, before anyone was to learn about the November '73 oil embargo, and the gas lines of late 1973 into 1974. The chart top right is Sindlinger's weekly reported confidence measurement of the Consumer's Positive Household Money Supply (HM$) from 1968 through 1974. A household with Positive HMS is one which has no negative response to our four money questions asked daily i.e., (1) current income is same or better than six months prior (2) expect no decline in income in six months hence, (3) expect same or better job security and (4) expect business to remain same or better in six months hence. A household with Positive HM$ spends according to its income level. A household with Negative HMS curbs its spending |