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M2 Update

Tyler Durden's picture


As usual, one chart is worth a thousand words, and a couple hundred billion in real, incremental dollars.


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Thu, 01/20/2011 - 21:31 | 892006 slow_roast
slow_roast's picture

Sweet...when do I get my check in the mail?

Thu, 01/20/2011 - 22:17 | 892145 Careless Whisper
Careless Whisper's picture

i'm calling bullshit on that chart. m2 is up 3.5% in one year. big deal. the chart distorts the increase because the chart doesn't show the full x and y axis. cheap trick.

Thu, 01/20/2011 - 22:24 | 892168 Jeff Lebowski
Jeff Lebowski's picture

Did someone say Cheap Trick?

Fri, 01/21/2011 - 07:43 | 892742 Michael
Michael's picture

I made a few new Youtube videos.

Congressman Steve Cohen AKA Nathan Thurm

Jesse Ventura Police State Fema Camps Remix

The Precautionary Principle Who Benefits?

Thu, 01/20/2011 - 22:26 | 892172 rosiescenario
rosiescenario's picture take on it, too.


I am far more worried that it did not go up far more.

Thu, 01/20/2011 - 22:29 | 892177 Careless Whisper
Careless Whisper's picture

actually, m2 may have gone up more. if the source of those numbers is the privately owned federal reserve bank, then who knows what the real numbers are. does anyone believe anything they say?

Thu, 01/20/2011 - 22:35 | 892192 rosiescenario
rosiescenario's picture

...and we should really be looking at M3 (or a re-creation of it) to get the big picture.


I just looked at a 20 year chart of M2 (sorry I was not able to pate it here for some reason, but the trendline in the present and that past are the same.

Thu, 01/20/2011 - 22:38 | 892195 rosiescenario
rosiescenario's picture

...and here are a couple of M2 and "M3" charts with rates of change...

Thu, 01/20/2011 - 22:44 | 892207 rosiescenario
rosiescenario's picture

...look at the "FTTM" chart....that shows the real impact of the POMO....that's the chart Tyler should post above....

Thu, 01/20/2011 - 22:41 | 892197 hedgeless_horseman
hedgeless_horseman's picture

M3 is too expensive to report these days.  The Federal Reserve can no longer afford to calculate it, so they said when they stopped doing so a few years back at the start of this depression.  Google "disingenuous" for details.


Thu, 01/20/2011 - 22:43 | 892206 wisefool
wisefool's picture

+1099 Timmay bitches!

Thu, 01/20/2011 - 22:57 | 892230 rosiescenario
rosiescenario's picture


....and look at those FTTM charts....and I was worrying about the recent price action in silver....nevermore

Thu, 01/20/2011 - 22:32 | 892185 rosiescenario
rosiescenario's picture

Fri, 01/21/2011 - 03:37 | 892631 Sudden Debt
Sudden Debt's picture

At least your comment makes sence!

Thu, 01/20/2011 - 22:40 | 892198 docj
docj's picture

So, we've basically been straight-line off to infinity since about 1995 (aka, the pinacle of the Greenspan era), right?

It would be very interesting to see that chart in inflation adjusted USD, methinks.

Fri, 01/21/2011 - 08:06 | 892755 reading
reading's picture

That chart was pulled directly from the St. Louis Fed -- no distortion just reporting a factual event -- you might not be used to seeing facts reported.  It can be shocking.

Thu, 01/20/2011 - 21:32 | 892008 bob_dabolina
bob_dabolina's picture

That looks like the price of food. Strange. I don't get it.

-Steve Liesman

Thu, 01/20/2011 - 22:43 | 892205 zaphod
zaphod's picture


Thanks for the laugh you made my day.

Thu, 01/20/2011 - 23:46 | 892308 Hephasteus
Hephasteus's picture

Steve Liesman is just the jewel of the dephile. He just keeps giving and giving and giving. Endlessly entertaining that man is.

Thu, 01/20/2011 - 22:07 | 892029 Xibalba
Xibalba's picture

"There's no inflation."  - Ben Shalom Bernanke, Market Czar

Thu, 01/20/2011 - 21:38 | 892032 UglyPatheticPauper
UglyPatheticPauper's picture

WHEEEEEEEEE!!!!!!  Going up the Roller Coaster!!!   Wait does this come down on the other side??? :(

Thu, 01/20/2011 - 21:40 | 892039 Devout Republican
Devout Republican's picture

Looks like a Stairway to Heaven.

Thu, 01/20/2011 - 21:40 | 892040 Stoploss
Stoploss's picture

Well, it looks like the shit is really hitting the fan tonight.

Thu, 01/20/2011 - 22:34 | 892191 sunny
sunny's picture

?? What fan are you watching?  I've seen nothing...fannish.


Thu, 01/20/2011 - 21:43 | 892055 Everyman
Everyman's picture


Thu, 01/20/2011 - 21:45 | 892057 SloSquez
SloSquez's picture

He said he was not actually printing money people.  "Not printing it".  What don't you understand?

"Some people think we are actually printing money".  We are not.  Jeesh!!!!

<Sarc OFF>

Thu, 01/20/2011 - 21:58 | 892095 muniguy
muniguy's picture

It's a cookbook!

Thu, 01/20/2011 - 22:20 | 892156 Cheesy Bastard
Cheesy Bastard's picture

Serling silver comment!

Thu, 01/20/2011 - 22:33 | 892190 docj
docj's picture

Well played!

Thu, 01/20/2011 - 23:27 | 892262 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

I have to agree with Prof. Frink.

Thu, 01/20/2011 - 22:01 | 892099 Hephasteus
Hephasteus's picture

They don't print it they digitally create it. You know when you get those emails that say Congratulations you have won the australian lottery. Well at the fed when they get those they credit thier account.

Thu, 01/20/2011 - 22:11 | 892126 SloSquez
SloSquez's picture

Yes, I would have liked a chance at my own line of questioning.  He made his comment, oh so, innocently before lunch.  Bizarre.

Fri, 01/21/2011 - 08:09 | 892758 reading
reading's picture

They are not printing money, they are computer-generating it...I guess they see that as different...

Thu, 01/20/2011 - 21:44 | 892058 Shell Game
Shell Game's picture

If you could graph a party that you weren't invited to, that is it..

Thu, 01/20/2011 - 21:55 | 892085 Hephasteus
Thu, 01/20/2011 - 22:07 | 892114 Shell Game
Shell Game's picture

lol, good one..  So I phoned, B.B. will only let me have clean up detail.

Thu, 01/20/2011 - 21:56 | 892081 gwar5
gwar5's picture

I don't think that includes all the USD$$ we Benicoptered over for the Eurotrash derivatives, either.

Paul Krugman: "More! More! More! Oh yeah.... and I hate that bitch in Alaska too!"

Fri, 01/21/2011 - 00:08 | 892361 Amish Hacker
Amish Hacker's picture

How dare he refer to the half-term governor that way...

Thu, 01/20/2011 - 21:54 | 892082 muniguy
muniguy's picture

"In October 1923 it was noted in the British Embassy in Berlin that the number of Marks to the Pound equalled the number of yards to the sun"

that be a lot of yards...

Thu, 01/20/2011 - 21:57 | 892094 Cdad
Cdad's picture

Oh, good grief.


Thu, 01/20/2011 - 22:02 | 892101 Common_Cents22
Common_Cents22's picture

I can confirm this.  I just got a new unsolicited Visa in the mail from Chase with a large credit limit.   I use it and pay it off monthly to cost them money.  During the credit crunch I got one high limit card cut to 750 bucks and I have great pay history.  Was prob because I paid it off monthly.  I'm tempted to max it out and not pay this time around ;)


Here comes the good times once again!  

Thu, 01/20/2011 - 23:12 | 892244 the grateful un...
the grateful unemployed's picture

use the card to buy gold and then tell them to fug off, or better yet pay them back in worthless fiat money

Fri, 01/21/2011 - 00:57 | 892474 RockyRacoon
RockyRacoon's picture

They get merchant fees on everything you buy so you're only half right.

But your heart is in the right place.

Fri, 01/21/2011 - 01:27 | 892528 Burnbright
Burnbright's picture

Actually when you swipe your card and pay them back you are making them exactly the amount that you pay them. They do not loan any money from deposit, they create the credit from your signature. 

Fri, 01/21/2011 - 01:36 | 892549 GoinFawr
GoinFawr's picture

Mark to SkyPie Bitchez!

Thu, 01/20/2011 - 22:02 | 892102 UglyPatheticPauper
UglyPatheticPauper's picture

Honestly I pictured deflation a bit differently?

Thu, 01/20/2011 - 22:04 | 892108 Bigger Dickus
Bigger Dickus's picture

Add some V to that M and all of us Zerohedgers will be able to buy the Playboy Mansion (incl. bunnies) for a few double eagles. Too bad nobody else will afford to pay for gas though. Used Porsche 997s will cost a few silver rounds.

Thu, 01/20/2011 - 22:23 | 892162 Cheesy Bastard
Cheesy Bastard's picture

Ben says VM=FucQ

Fri, 01/21/2011 - 01:11 | 892500 Hammer Down
Hammer Down's picture

Love it

Thu, 01/20/2011 - 22:08 | 892118 RmcAZ
RmcAZ's picture

As much as it sucks, this isn't really anything new.

Thu, 01/20/2011 - 22:12 | 892131 max2205
max2205's picture

If there's a down zag after that last up zig then the shows over folks.

China is at a point where panic selling could start. Euro, well, is trash and India is deflating rapidly. God I love GOLBAL MELTDOWNs!!

TD. Can you post M 2 reguarly I seem to loose track of it

Thu, 01/20/2011 - 22:25 | 892169 attst487
attst487's picture

Would be cool to watch a live M2 chart and root for the bull!

Thu, 01/20/2011 - 22:14 | 892137 bankrupt JPM bu...
bankrupt JPM buy silver's picture

that looks like my wang on viagra

Thu, 01/20/2011 - 22:35 | 892144 gwar5
gwar5's picture

Here's a not so shocker shocker out tonight...


State Bankruptcy Option Is Sought, Quietly -


And here's a rich one by Peter Orzag, now at Citibank, and $3.5 Trillion of taxpayers money later. / Comment / Opinion - America must brace itself for turbulence



Thu, 01/20/2011 - 22:18 | 892150 Stevm30
Stevm30's picture

Once 1 trillion of reserves flood the system this number will double.  $1 TRILLION x 1-.10/.10 (.10 reserve ratio) = $9 trillion. 

Thu, 01/20/2011 - 22:42 | 892204 buzzsaw99
buzzsaw99's picture

Sure beats working in a chinese sweat shop trying to make that much.

Thu, 01/20/2011 - 22:58 | 892227 flow5
flow5's picture

Weekly M2 has grown at a 5.3% SA change in the latest 13 week period (WSJ data).

M1 remains at an excessive 12 percent change (SA annual rate), in the last 6 months (7.8 y-o-y).

But you can't use either of those metrics to measure aggregate monetary purchasing power (i.e., nominal gDp).

If you were a true "FED WATCHER" you would have caught the big new 2 year revision this release.

Thu, 01/20/2011 - 23:43 | 892301 Tyler Durden
Tyler Durden's picture

Actually you mean if we were a true "revision watcher"

Thu, 01/20/2011 - 23:05 | 892237 TheAkashicRecord
TheAkashicRecord's picture

This is my favorite chart M1 Money Multiplier ... pushing on a string[1][id]=MULT



Thu, 01/20/2011 - 23:09 | 892241 the grateful un...
the grateful unemployed's picture

don't know why you don't put up the M2 velocity, which is inverse to the chart. 

Thu, 01/20/2011 - 23:28 | 892260 TheGreatPonzi
TheGreatPonzi's picture

Do you really think the FED can't demand lending from its member banks?

The "The FED can print, but will the money flow into the economy" deflationist rhetoric is ridiculous.

It assumes there is still a barrier between governments, central banks and banks. And it also assumes that consumer credit is still the main driving force behind inflation, which is not the case today (QE and POMO target stocks).

And even if deflation was a possibility, it would mean the death of the US government by starvation, and end in the same result: the US dollar going down in flames.

Thu, 01/20/2011 - 23:37 | 892282 Bigger Dickus
Bigger Dickus's picture

Not necessary. Any meaningful uptick in velocity, no matter how low the basis is, will lead to light switch hyperinflation.

Thu, 01/20/2011 - 23:55 | 892331 jimmyjames
jimmyjames's picture

If you look at the components of M2-you see that it's made up from many things that do not count as money/credit-such as time deposits/savings/retail money funds etc.

I don't believe it's a reliable indicator of money or credit expansion although it consists of that too-

Savings rates are soaring both personal and especially businesses that maxed out credit lines in case of another credit freeze and now they have that cash sitting on their books but are not investing it other than to hedge the interest buy buying and holding T-bills etc.

So if the savings rate is incresing and we know it is-that will have a positive effect on M2-

M1-M2-M3 all contain MZM and so imo are not acurate money measurements

Fri, 01/21/2011 - 00:10 | 892367 walküre
walküre's picture

"Savings rates are soaring both personal and especially businesses"

I don't think that's generally true.

We see mortgage defaults increasing. Unless people took cash out of their accounts over time, they have a hard time hiding savings from lenders in a default. Even if they did, this only applies to a small group of people who were smart enough to fuck the banks back.

Retail stats were up and inventory purchases were up also. How can savings rates be up as well?

Incomes declined across the board, unemployment increased and food stamp recipients and other welfare recipients grew in number as well.

I think your argument is off.

Thu, 01/20/2011 - 23:59 | 892340 walküre
walküre's picture

So sad. Many sheep will look at this and immediately think they are richer!

Money Multiplier is up huge! That's a good thing, right?

Fri, 01/21/2011 - 00:16 | 892385 Amish Hacker
Amish Hacker's picture

How could anything that multiplies money be a bad thing? Another year or two and everyone in America will be a millionaire. Added benefit: our kids will be better at math.

Fri, 01/21/2011 - 00:02 | 892347 mt paul
mt paul's picture

don't worrie

they're only dollars...

Fri, 01/21/2011 - 00:56 | 892469 jimmyjames
jimmyjames's picture
by walküre
on Thu, 01/20/2011 - 23:10


"Savings rates are soaring both personal and especially businesses"

I don't think that's generally true.


Did you bother to check?


This one shows the rush to draw on credit lines-after the credit freeze ended-

Hussman did a good write up on this-which proved that most of the cash on business balance sheets is actually borrowed money-


Fri, 01/21/2011 - 01:13 | 892506 gangland
gangland's picture

my top are , Regg Midd, bk, phx cap r, econp, maybe 2-3 others, besides td , i got a secondary list too lng

Fri, 01/21/2011 - 01:13 | 892508 Fix It Again Timmy
Fix It Again Timmy's picture

Just because 6+ billion people are saying:

doesn't mean you have to!

Fri, 01/21/2011 - 01:35 | 892545 jimmyjames
jimmyjames's picture

by walküre
on Thu, 01/20/2011 - 22:59

So sad. Many sheep will look at this and immediately think they are richer!

Money Multiplier is up huge! That's a good thing, right?

You're not serious?

M2 mult-


Fri, 01/21/2011 - 03:38 | 892632 Yen Cross
Yen Cross's picture

  Mr Durdan,

   Respectfully. I know an ascending chart when I see one. Can we get some TRADE ideas for Friday? sector trades at least?

Fri, 01/21/2011 - 03:55 | 892647 mick
mick's picture

Looks a lot like the chart for agricultural commodities to me.

Fri, 01/21/2011 - 05:59 | 892692 savagegoose
savagegoose's picture

lloks like m3 came out of negative, isnt it time to stop the printing now?

Fri, 01/21/2011 - 06:10 | 892696 John McCloy
John McCloy's picture

 And yet housing still stagnates..Ben scratches head again as the one thing he needs to reflate cannot as I have said for 2 years. Those prices are never coming back because they need to and want to go down.

Fri, 01/21/2011 - 06:32 | 892706 FurQ
FurQ's picture

This doesn't mean anything, without looking at long term trends, the money supply could have increased going into december due to

Fri, 01/21/2011 - 10:56 | 893103 flow5
flow5's picture

No, I meant what I said.   Rates-of-change in monetary flows (our means-of-payment money X's its transactions rate of turnover) is equal to the same computation for nominal gDp, for the same time period. 

As any monetarist knows, there is only one valid metric for each variable in the equation of exchange.  And that proxy has been significantly revised for past 2 years (& some months - years beyond).

A true fedwatcher, knowing the correct lags, would have been on top of it.


Fri, 01/21/2011 - 11:48 | 893310 Cash_is_Trash
Cash_is_Trash's picture

Grow it like there's no tomorrow! Hell, Lord Keynes would agree with me.

Imagine what M3 looks like...

Sat, 01/22/2011 - 20:47 | 896485 Hephasteus
Hephasteus's picture

Uhh question.

Why does this chart look shockingly similar to the price of gold chart over the same period. Compete with a small dip in june.

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