Mmg Presentation Israel September 2014

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


Disclaimer

While MMG Economics & Research Ltd. believes this information to be reliable, no warranty is given to its accuracy and persons who rely on it do so at their own risk. In so far as this information contains material from other sources, MMG Economics & Research Ltd. has not checked those sources and accepts no responsibility for the accuracy of that material. All information is for the person to whom it is provided and is not to be passed on to any third party.

Additionally, MMG Economics & Research Ltd. does not recommend that any investment decisions be based solely on the information provided. This information is of a general nature. It has been prepared without taking into account your particular investment objectives, circumstances, financial situation or needs. When considering your own objectives you will need to consider whether the advice is appropriate in light of your particular investment needs, objectives and financial circumstances.

Apr 9, 2023 2


Apr 9, 2023 3

Economic Framework


The foundation of the creation of wealth

4

PURPOSEFUL ACTIVITIES


5

Means Ends


6

Production

Demand


7

SavingsConsumption


8

Consumption Savings


9


Expansion in real wealth

10

Production

Consumption Savings

INVEST IN NEW OVEN


11

Life Sustenance

POOL OF FUNDING


12

Economy

Pool of Real Funding

Economy



Wealth creation

13


(Wealth)


Introducing money (medium of exchange)

14

Something

Production

Something

Consumption


15

Nothing

No production

Something

Consumption

The effect of printing money


The money supply and its effects

16


Monetary pumping diverts pool of funding away from wealth producers

17

Money



18

Money



Inflation

19

MoneyMone

yMoney


The essence of prices

20

Price

Real stuff

Money


21

Money


The meaning of economic bust


Case of depression

22

Money


Unemployment


Deflation

23

MoneyMone

y Money


USA

Apr 9, 2023 24


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

%


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

%


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


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


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

%


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


ISRAEL

Apr 9, 2023 31


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

%


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

%


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


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

%


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

%


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


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

%


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

%


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

%


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

%


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

%


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


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


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

%


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


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

%


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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Apr 9, 2023 49

Mmg Presentation Israel September 2014

Economy & Finance

Transcript of Mmg Presentation Israel September 2014