Global monetary trends are all going their own ways not leading to the notion that there is any policy convergence underway. Neither can we really say that monetary policies at the country level are being tailored for their respective domestic needs. Monetary policies instead appear in some places to be not under the control of the authorities to any great degree. Low interest rates have cost the monetary authorities some control over their their money supply and central banks are employing whatever policies they can (sometimes without much effect) to try to reach either a monetary or fiscal objective. The policies are actually as messy as the charts appear.

Monetary trends in yr/yr growth rates show US money supply has come down from its humped acceleration but its deceleration seems to be over as it is still growing at a pace of 7.3% over 12-months. The EMU area's monetary growth has accelerated to 4.6% yr/yr and is on a steady progressive increasing growth rate path in its 12-month rate of growth. Japan's M2-Plus CDs measure is slightly weaker at 2.5% yr/yr. Meanwhile, the UK continues to nurture the bust in money growth after the boom. Despite a recent uptick, UK M4 growth is still showing shrinkage at an annual rate of 2.4% over 12-months. Its 12-mo growth rate has been negative for 22-months in a row.

Real money balances generally are rising except in the UK, of course.

In EMU credit growth continues to contract. After two years of growth credit is pulling back in the Zone. Adjusted for inflation, however, the rate the growth of the previous two years turns to decline and the pace of shrinkage for credit is still accelerating. In short the euro-Zone has contractive fiscal policies in place alongside contractive credit policies. Money growth is engaged in the barest growth and providing no real stimulation. But the real problem, as in the US where money supply growth is robust, is getting any of that banking sector liquidity into the loan market.

Banks simply seem to be avoiding any more lending exposure. In the US while lending for mortgages is up almost all of it is still being channeled through the troubled government agencies, Freddie Mac and Fannie Mae.

In Europe much of the lending banks had been doing was to sovereigns and that has been stopped except to the extent that by using LTRO funds local banks are standing by their local governments. The cross border sovereign market is dead. On balance the money/credit picture in Europe is still bleak and when coupled with the current weak growth threatening recession and ongoing austerity crimping the outlook, the prospect for a European turnaround soon is not very strong.