I can’t think of three topics that cause more confusion than money creation, monetary inflation, shadow money.
And that’s before trying to calculate money on the sidelines. Here is some reference material that might be helpful:
1. Calculation of Sidelines Money
Investors could be disappointed if they anticipate tons of money waiting to get back into the stock market, since “cash on the sidelines” is much less than estimated, Goldman Sachs analysts said. Based on their calculations, net equity inflow from individuals, institutional investors and corporations over the next several quarters could total $600 billion, the analysts said in a research note on Wednesday. “‘Cash on the sidelines’ is much less than the $3.4 trillion in money market mutual fund assets that market participants typically cite as the No. 1 reason stocks are poised to rally,” analysts wrote.
2. Shadow Money Creation
Credit Suisse analysts Sweeney and Lantz discussed the shadow money supply on May 11, 2009 with Tom Keene at Bloomberg:
This is the research report they refer to in the interview. Click Open in New Window to view enlarge document.
3. Monetary Inflation
This is an excerpt from the August 2009 issue of SED Profile by Woody Brock that covers all the bases:
Click Open in New Window to view enlarge document.