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M2 Update
Once again, presented without comment.
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Multiplier just getting smaller and smaller.
Where is the amount of dollars in circulation captured due to the swap lines? Is that M3.5 or somthing? How much garbage-ier currencies are we holding and how much is in other central banks?
How many USD are outstanding on the lines? Just curious.
It looks almost exactly the same, just a gnat's ass lower on the curve.
M4, bitches!
http://www.google.com/images?q=m4
better than expected. We have time to prepare, isnt that great!
Been preparing for a year now . island of america should have tipped by now, most folks are on east coast, so is the gold and us folks in the west dont weigh much due to running in place and getting high.
Thanks to bernanke, my anti hero i have some silver to look at while we drown in a sea of lies
I thought that was only a CNBC and Bloomberg thing. Better than what ? Dam !!! Can't get away from it.
I prefer M1 as an economic indicator.
Money in demand deposits ready to be spent.
I think in terms of M1 supply as a reaction to higher prices rather than the cause for higher prices.
oh geeze.... robo's charts influence inflation more that M1
It looks like the tribal region of Pakistan - is Osama hiding in those there mountiains?
M1 then can be thought of as a lagging indicator rather than a leading indicator.
Can it be thought of as a current indicator? Why do I never hear anyone say that?
Good thought.
Current would be accurate.
No matter what M we look at today the multiplier seems to be sitting on it's butt. Not too much bounce to it.
How about this? SC:1 for short
http://2.bp.blogspot.com/_t6Gs_TbZqnY/RvrF9PEN2DI/AAAAAAAAAb4/725uUtvEOE...
For me, the best current indicator of your local economy is the clunker-o-meter. At anytime during your commute assess the four cars closest to you. Using the table, below, determine the health of the local economy.
# of vehicles w/ unrepaired damage
0=You must be in Hong Kong
1=You are in LA during a depression, or your local economy is boomin'
2=Your are in a recession
3=You are in a depression
4=If they are all yellow you are in NYC, if not you are in a third world country
5=You ride the bus and you are poor because you cannot follow direction
This means that people are selling their stocks and mutual fun holdings and putting money into some combination of savings/CD/money market accounts which is what M2 growth reflects, at least part of it. Another part is of course currency printing. This is nothing compared to the $2 Trillion annual credit deflation.
People selling stocks does not make M2 go up. After all they need to sell it to someone - right? So its a wash.
What makes these monetary aggregates go up is more Borrowing. Borrowing is what creates new "money".
Well they just sell it to HFT's using the FEDs money!
M2 trending up
Private payroll estimates are trending down (and coming in below)....150K, 105K, 83K, 40K
The stock market has maintained the same price the jobs market is declining.
The stock market is benefiting but the jobs market mandate isn't being fullfilled.
What's the solution Ben?.....
Maybe he's coming to his senses?
And you think yourself badly off in the U.S.:
http://www.reuters.com/article/idUSTRE67H1UH20100818
This is video game money. At this point of the game the numbers are increasing. That's all. Nothing to see here, move on with your life.
my comment, you guys are just fucked up late/mid night. are we all smokin the same garden?
Yes.
So if M2 is $8.6 trillion and the total federal debt is $13.5, the Fed could buy up all the debt and only devalue the currency by 63%. Since they succeeded in devaluing the currency 95% in the last century, they should be able to hit 63% without evoking any Clarity cataclysms. Couple this with reducing Federal spending back to a balanced budget with annual 10% cutbacks in Federal salaries and entitlements and we've got the makings of a new leg up without chaos in the streets.
Except for the fact that probably $100T of US obligations adjust for inflation. They have to default somewhere. You cut the spending down on the states and federal down to balance and you kill the economy outright.
No way out. The only unknown is how long it takes to happen.
night
yes it is, and sleep well
M2...isn't that a BMW?
The steps to inflation aren't so rigid and well-defined as people would like to believe. We are getting conditions where inflation can take hold. We already have inflation relative to the level of the economy, ie, depression level employment with pockets of deflation and yet prices are back to boom time levels. Any further acceleration will be toxic for sure. 3-4 decades of monetarism has created a huge quandry with no easy answers. The era has passed.
We will have deflation in the paper assets they try to sell us, and price inflation in what we use
Pick a part of the chart, shift the axes around, voila - a disaster.
Or, you could look at the whole chart and see that actually, M2 is not increasing as fast as it has over the course of this crisis.
In fact, if you check out the M2 chart from 05 to 10 we are back on the trend line.
Now, that may not be a good thing, but it is not news.
Here's the shadowstats page on money supply, for more context:
http://www.shadowstats.com/charts/monetary-base-money-supply
M3?
just doing the captcha
Okay... M2 includes money market accounts. Let's say money moves out of investment and into money market accounts. This doesn't necessarily mean that it will cause inflation (assuming it's simply parked there). Therefore, velocity by definition will fall, especially in a flat to possibly negative nominal GDP environment.
the BOJ used to park money in MM funds, and then periodically they would mop it up. No one ever fully explained why or how they did it, but we are definitely headed for our own lost decade
yo momma
I knew it!!! BMW is building an M2 at last.
change in M2 is about as good a predictor of inflation as change in the number of hair on Bernanke's head. I really wonder why some people continue looking at such worthless data (that includes central bankers btw)...
As Quantum was saying at the top (and it looks like nobody took notice from what I read below his comments), it helps to keep things in perspective.
http://img20.imageshack.us/img20/6573/45541064.jpg
Yawn...people save up now for the holiday season. You guys should know that already...oh yeah no holidays for zero hedge, bummer.
Notice the ramp up last 4th qtr, followed by a massive decline in jan.
Question...what are the first signs of inflation (or maybe hyperinfltion)? is it something that hits overnight or gradually sneaks up? I ask this because, if I can read the chart correctly in my no coffee/sleep haze, the BDI made a huge move (+3%?) up last night. Did raw materials demand suddenly spike (not seen reports to that effect) or is this a leading indicator of inflation?
Reminds me of a Ant farm I had once as a kid. Always busy working on new routes but never really getting there.
Here is one definition of M2
"One measure of the money supply that includes M1, plus savings and small time deposits, overnight repos at commercial banks, and non-institutional money market accounts. A key economic indicator used to forecast inflation."
Next step is ....Have we had deflation in the last year ?
If we have been in a deflationary environment, why has this indicator been going UP ?
It would be more interesting to see the chart over a 2 year period
Savings being in the mix, maybe increased savings may be the reason, but there is no way of being sure.
I tend to agree with others that the chart is meaningless.
http://research.stlouisfed.org/fred2/series/M2
" A key economic indicator used to forecast inflation."
Complete bullshit proposition as can easily be demonstrated with the following graph showing changes in M2 vs changes in CPI over time:
http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=M2&s[1][transformation]=pc1#
(Add Data series CPIAUCNS, change observation date range from 1980-01-01)
At the very best changes in M2 lag CPI changes and correlation is poor. But the usual monetarists will probably ignore empirical evidence and remain convinced that M2 is a key economic indicator used to forecast inflation...
"the following graph showing changes in M2 vs changes in CPI over time:"
On the graph you linked to, I only see it showing the percent change in M2 from the previous year. Where does the comparison to CPI come in to play?
Also, since you have such a long timeline to spread the data over, how do you correct for the change in the way they calculated CPI (minus food and energy costs) that came after 1980?
Now, the big decline in change from 2009 to present looks very interesting - where did all of the TARP money go, and why didn't the velocity jump from those expenditures?
follow the link, then click "Add Data series" at the bottom of the page, enter CPIAUCNS, change observation date range from 1980-01-01.
You'll get a comparison over the last 30 years with one fixed CPI measure over the time range.
As you will easily see from this changes in M2 actually lag CPI changes (and with very poor correlation) by between 2 and 10 years... a strange paradox for ignorant monetarists of which the bankrupt theories actually predict the opposite.
Sorry if it wasn't clear.
I heard that China is sending over slave ships this week to pick up our first, second, and third borns to take back to Shanghai to be indentured.
Oh well, I hope the Israeli/Palestinian talks go well. I'm going back to my bon bons now
What this graph actually shows is M2's pitifully weak response to the Fed's radical infusion of M0. The Fed pumped up M0 by about 130% since Sept. 2008. This graph shows that M2 has gained less than 3% over the past 14 months. The banks prefer to earn those 25 bips holding cash in Fed reserves accounts, where it doesn't create M2.
We have not been having deflation, we've been having very moderate inflation. M2 isn't a good forward-looking indicator, but it corresponds to inflation fairly well.
M2 also corresponds to total system credit fairly well. Increased government borrowing is outrunning private deleveraging.
"M2 also corresponds to total system credit fairly well."
There is so much wrong in that short proposition...
Here's a puzzle for you : explain how between 1980 and today M2 grew from $1.5 trillion to $8.5 trillion (factor 5.7) when total credit market grew from $4.5 trillion to $52 trillion (factor 11.6) (check Fed's Z1 flow of funds for the data).
The simple truth is that M2 does not, in any way shape or form, and contrary to what neoclassical economists think, track the evolution of credit.
For credit can expand even without the M2 monetary supply changing by a cent. For example if I lend you $100, money supply between us two remains unchanged but credit outstanding has increased by $100. This is a fundamental misunderstanding of neoclassical economists on how credit works which causes them to be so dumbfounded with what is going now... They keep looking at the wrong data. M2 doesn't matter. Change in credit does.
M2 could make the IBD 100.
What the chart clearly shows is what the statistician has chosen to show us. Take that for what it is worth.
DOW chart update:
http://stockmarket618.wordpress.com
i think you just just B Supercycle
got kind of a RAP down soul sound.
From wikipedia:
CONCLUSION from graph above and definition: we are headed for inflation.
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