This chart compares US GDP growth vs. the CPI vs. M3 growth from 1980 to 2005. Note the difference between CPI (
red line) and GDP growth (
yellow line). M3 is the
blue line. According to the unwritten rules of the German Bundesbank, the best keeper of price stability in the world, I prefer M3 over inflation figures as it gives you a better idea how much money is actually sloshing around in relation to the goods and services produced.

As I am still fiddling around with editing graphics for this blog, here the absolute figures (data source: Federal Reserve Bank of St. Louis):
- Gross Domestic Product (GDP) rose from 2.725 to 12.182 trillion dollars or 347 percent.
- The Consumer Price Index (CPI) rose from 78 (100=1983) to 191.3 or 245 percent.
- Money supply M3 rose from 1.823 to 9.494 trillion dollars or 423 percent.
Note: M3 consists of currency in circulation plus overnight deposits, deposits with agreed maturity up to 2 years, deposits redeemable up to 3 months' notice, repurchase agreements, money market funds and papers plus debt securities issued up to 2 years.
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