mmg presentation israel september 2014
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A Member of the Morgan & Morgan Group
Israel
Dr Frank Shostak MMG Economics & Research Ltd.
Dr. Frank ShostakMMG Economics & Research Ltd.
Apr 9, 2023
September 2014
1
A Member of the Morgan & Morgan Group
Disclaimer
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Economic Framework
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The foundation of the creation of wealth
4
PURPOSEFUL ACTIVITIES
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5
Means Ends
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6
Production
Demand
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7
SavingsConsumption
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8
Consumption Savings
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9
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Expansion in real wealth
10
Production
Consumption Savings
INVEST IN NEW OVEN
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11
Life Sustenance
POOL OF FUNDING
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12
Economy
Pool of Real Funding
Economy
Pool of Real Funding
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Wealth creation
13
Pool of Real Funding
(Wealth)
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Introducing money (medium of exchange)
14
Something
Production
Something
Consumption
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15
Nothing
No production
Something
Consumption
The effect of printing money
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The money supply and its effects
16
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Monetary pumping diverts pool of funding away from wealth producers
17
Money
Pool of Real Funding
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18
Money
Pool of Real Funding
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Inflation
19
MoneyMone
yMoney
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The essence of prices
20
Price
Real stuff
Money
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21
Money
Pool of Real Funding
The meaning of economic bust
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Case of depression
22
Money
Pool of Real Funding
Unemployment
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Deflation
23
MoneyMone
y Money
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USA
Apr 9, 2023 24
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USA AMS
Apr 9, 2023 25
0
2
4
6
8
10
12
14
16
2008:01 2010:01 2012:01 2014:01
%CHNG US AMS (YOY)
MONTHLY
%
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Federal Reserve Balance Sheet
Apr 9, 2023 26
-40
0
40
80
120
160
2008:01 2010:01 2012:01 2014:01
%CHNG FED BALANCE SHEET (YOY)
MONTHLY
%
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US Industrial Production
Apr 9, 2023 27
-3
-2
-1
0
1
2
3
4
5
2012:01 2013:01 2014:01 2015:01
%CHNG US INDUSTRIAL PRODUCTION (YOY)
MONTHLY
%Forecast
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US CPI
Apr 9, 2023 28
0.8
1.2
1.6
2.0
2.4
2.8
3.2
2012:01 2013:01 2014:01 2015:01
%CHNG US CPI (YOY)
MONTHLY
%
Forecast
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Fed Funds Target Rate
Apr 9, 2023 29
0
1
2
3
4
5
6
7
2000:01 2005:01 2010:01 2015:01
FEDERAL FUNDS RATE TARGET
MONTHLY
%
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S&P500
Apr 9, 2023 30
2,100
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,3002012:01 2013:01 2014:01 2015:01
S&P500
MONTHLY
IND
EX
Forecast
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ISRAEL
Apr 9, 2023 31
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Bank of Israel Balance Sheet
Apr 9, 2023 32
-40
-20
0
20
40
60
80
2008:01 2010:01 2012:01 2014:01
%CHNG BANK OF ISRAEL BALANCE SHEET (YOY)
MONTHLY
%
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Israel AMS
Apr 9, 2023 33
-20
-10
0
10
20
30
40
50
60
70
2006:01 2008:01 2010:01 2012:01 2014:01
%CHNG ISRAEL AMS (YOY)
MONTHLY
%
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House Prices
Apr 9, 2023 34
360
320
280
240
200
1602000:01 2005:01 2010:01 2015:01
ISRAEL HOUSE PRICE INDEX
MONTHLY
IND
EX
199
3=10
0
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Housing Starts
Apr 9, 2023 35
-30
-20
-10
0
10
20
30
2008:1 2010:1 2012:1 2014:1
%CHNG ISRAEL HOUSING STARTS RESIDENTIALS (YOY)
QUARTERLY
%
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Real GDP
Apr 9, 2023 36
1
2
3
4
5
6
7
8
9
10
2008:1 2010:1 2012:1 2014:1
%CHNG ISRAEL GDP (YOY)
QUARTERLY
%
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Manufacturing
Apr 9, 2023 37
25
30
35
40
45
50
55
60
65
2006:01 2008:01 2010:01 2012:01 2014:01
ISRAEL MANUFACTURING PMI
MONTHLY
IND
EX
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Unemployment
Apr 9, 2023 38
5.0
5.5
6.0
6.5
7.0
7.5
8.0
2008:1 2010:1 2012:1 2014:1
ISRAEL UNEMPLOYMENT RATE
QUARTERLY
%
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CPI
Apr 9, 2023 39
-2
-1
0
1
2
3
4
5
6
2006:01 2008:01 2010:01 2012:01 2014:01
%CHNG ISRAEL CPI (YOY)
MONTHLY
%
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BoI Policy Interest Rate
Apr 9, 2023 40
0
1
2
3
4
5
2008:01 2010:01 2012:01 2014:01
ISRAEL POLICY INTEREST RATE
MONTHLY
%
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Long-term bond yields
Apr 9, 2023 41
2.4
2.8
3.2
3.6
4.0
4.4
4.8
5.2
5.6
6.0
6.4
2008:01 2010:01 2012:01 2014:01
YIELDS ISRAEL GOV. 10YR BOND
MONTHLY
%
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AMS differential – Israel v USA
Apr 9, 2023 42
-20
-10
0
10
20
30
40
50
60
2008:01 2010:01 2012:01 2014:01
AMS YOY%CHNG DIFFERENTIAL:ISRAEL VS US
MONTHLY
%
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Shekel
Apr 9, 2023 43
4.1
4.0
3.9
3.8
3.7
3.6
3.5
3.42012:01 2013:01 2014:01 2015:01
US$/SHEKEL
MONTHLY
SH
EK
ELS
PE
R U
S$
Forecast
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Government Debt-GDP ratio
Apr 9, 2023 44
.64
.65
.66
.67
.68
.69
.70
.71
.72
.73
2008:1 2010:1 2012:1 2014:1
ISRAEL GOV.DEBT TO GDP RATIO
QUARTERLY
RA
TIO
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Industrial Production
Apr 9, 2023 45
-15
-10
-5
0
5
10
15
2012:01 2013:01 2014:01 2015:01
%CHNG ISRAEL INDUSTRIAL PRODUCTION (YOY)
MONTHLY
%
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Equities
Apr 9, 2023 46
1,600
1,400
1,200
1,000
800
6002008:01 2010:01 2012:01 2014:01
TEL AVIV STOCK EXCHANGE TA 25
MONTHLY
IND
EX
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Government Expenditure
Apr 9, 2023 47
-1
0
1
2
3
4
5
6
2008:1 2010:1 2012:1 2014:1
%CHNG ISRAEL GOVERNMENT EXPENDITURE (YOY)
QUARTERLY
%
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Government Spending-GDP ratio
Apr 9, 2023 48
21
22
23
24
25
26
27
28
1995:1 2000:1 2005:1 2010:1 2015:1
ISRAEL GOVERNMENT SPENDING TO GDP
QUARTERLY
%
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