Wednesday, September 21, 2011

Money Money + Money -- Money supply update

The broadest money supply figures available (M2 + institutional money market funds) continues to trend higher.  

A note to all of you who are fearful of hyperinflation, this figure would be skyrocketing upwards instead of being in the ~+6% year over year range if we were entering a phase of very high inflation.  Yes, the narrower measures of money supply are growing but they aren't being transmitted to the rest of the economy (see Japan, deleveraging) as there is still a reluctance to borrow by the US consumer.  See my recent previous posts on mortgage rates and  total mortgage loans outstanding for examples of how the Fed's pumping money into the financial system is not being transmitted into higher lending (and thus higher prices)


  1. hi greg,

    qe3 will come n all this money is like a will let go if we ever get any traction.

  2. But that is a big 'when'... When it happens no-one knows but I'm quite certain the Fed will remain accomodative way to long after the fact. We'll then have another opportunity to make money.

  3. yeah always comes back to that 'when' part.

    something tells me ALOT more 'down' between 'here' and 'when'

    my brand of beer up 16% in three yrs. tho....same on electricity up....hard assets down (minus gold)

  4. May you live in interesting times. :(
    Its actually frustrating trying to build a low risk portfolio for retirees right now. The Fed is purposely screwing them.