Monday, October 18, 2010

Money Money + Money -- Money supply update

The broadest measure of money supply still reported by the Federal Reserve continues falling albeit at a decelerating pace.

While the pace of decline is moderating, broad money (M2 + Institutional Money Market Funds) continues dropping. I wonder if QE 2.0 will put a floor in the decline?

As you can see money supply growth is negative, something not seen during this entire data series.  As a growing money supply implies a growing (real) economy this does not bode well.

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