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Australia reports latest “broad money” supply for period ended 30 April 25.

Broad money over the 12 months ended 30 April 2025 grew by nearly 6.0% (5.84%). This jumped from the previous month report of YoY of 4.96%. It also compares to the reported March 25 12 month Consumer Price Index (CPI) move of 2.4% - Reserve Bank of Australia’s preferred measure of inflation.

Not that many Australians took notice or even understand what these figures mean for them - choosing to vote in an inflationary (Labor) government that presented a budget showing a string of deficit budgets into the next decade before the election!!!

So Australia your purchasing power of your fiat money has dropped by at least 5.84% across the board since April 2023 - and significantly more against “real money”. In this regard if we measure inflation against the movement in gold prices over the last twelve months we are looking at 35.2% inflation and against Bitcoin significantly more!!!

Interestingly, the Australian Bureau of Statistics (responsible for measuring CPI states on its website …

"The CPI weights are regularly updated to ensure the weights used in the CPI basket reflect contemporary household spending patterns”

They conveniently ignore that price drives the market and affects spending patterns. If price goes up then people will gradually find an alternative or curtail expenditure to the extent possible”. Generally, people will look for cheaper alternatives or not spend at all. This means that by regularly adjusting the CPI basket it is highly likely that the CPI is reflecting the lower end of price movements, in arrears. Each adjustment also means that the previous figures unless completely rebased (Which I understand the ABS endeavours to do) are like comparing apples with oranges.

What’s the takeaway …

1. Increased money supply is inflationary

2. CPI, on which monetary policy is partially based, gives the wrong signal

3. The election of a deficit budget (debt-driven) Australian Government will result in more inflation

4. The desire to reduce interest rates cannot be reasonably achieved.

5. Capital flight from the country or to alternatives that are not fiat money based is highly likely.

Sadly Australia voted for this as many have a high time preference, ie. I want it now and stuff the future. Some call it short term thinking; however, it is more related to greed and immediate gratification.

#money #economy #australia #bitcoin #gold #election #government

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Neoma Wunsch 7mo ago

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