I got to updating the sheet again. I thought it was quite interesting that the slope of money supply was quite constant during the whole time we got regular econ reports (thanks again, molp!), even though a few commodities start to hit MM (ask) prices. In fact checking the MM balance from the report we see that the currency that they destroy (~50M space euros) is smaller then the total increase in currency (~800M space euros). We also see that this is mainly driven BSE.AI1 (at least this month, 2023-11 was more even across CXs but still BSE).
A few months back @FireFreak defended the position on discord that inflation due to MM bid gaming would be a self correcting problem, because it would increase prices of all other goods until the excess currency created by bid gaming is swallowed by MM asks. Maybe it’s too early to say, but it seems to me now that while that argument holds in equilibrium it may take us a while to actually get there. On the other hand BSE MM seem to increase the rate at which they destroy currency in the last months, though it’s still low in absolute terms.
So why does the currency increase does not slow down as expected so far? One point might be the size of the markets. According to my collected data around 120M space euros worth of BSE changed hands through CXs in December. Consequently even if all that went through the MM ask, it would not be able to balance the increase in money supply. It would take a few more materials to hit MM asks before we can expect money supply to stabilize.
Thanks for your excellent analysis!
Thanks for continuing to produce these. If I could request more items to be added, I would love to see Construction Parts.