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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 | Link to Comment slow_roast
slow_roast's picture

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

Thu, 01/20/2011 - 22:17 | Link to Comment 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 | Link to Comment Jeff Lebowski
Jeff Lebowski's picture

Did someone say Cheap Trick?

http://www.youtube.com/watch?v=HBQ9dm7zaQU

Fri, 01/21/2011 - 07:43 | Link to Comment Michael
Michael's picture

I made a few new Youtube videos.

Congressman Steve Cohen AKA Nathan Thurm

http://www.youtube.com/watch?v=mY-ULCwO1KU

Jesse Ventura Police State Fema Camps Remix

http://www.youtube.com/watch?v=Z2o6b0Avu8o

The Precautionary Principle Who Benefits?

http://www.youtube.com/watch?v=4GIkWuuq45I

Thu, 01/20/2011 - 22:26 | Link to Comment rosiescenario
rosiescenario's picture

...my take on it, too.

 

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

Thu, 01/20/2011 - 22:29 | Link to Comment 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 | Link to Comment 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 | Link to Comment rosiescenario
rosiescenario's picture

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

http://nowandfutures.com/key_stats.html

Thu, 01/20/2011 - 22:44 | Link to Comment 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 | Link to Comment 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 | Link to Comment wisefool
wisefool's picture

+1099 Timmay bitches!

Thu, 01/20/2011 - 22:57 | Link to Comment rosiescenario
rosiescenario's picture

...http://nowandfutures.com/key_stats.html

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

Thu, 01/20/2011 - 22:32 | Link to Comment rosiescenario
rosiescenario's picture

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

At least your comment makes sence!

Thu, 01/20/2011 - 22:40 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment zaphod
zaphod's picture

+10

Thanks for the laugh you made my day.

Thu, 01/20/2011 - 23:46 | Link to Comment 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 | Link to Comment Xibalba
Xibalba's picture

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

Thu, 01/20/2011 - 21:38 | Link to Comment 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 | Link to Comment Devout Republican
Devout Republican's picture

Looks like a Stairway to Heaven.

Thu, 01/20/2011 - 21:40 | Link to Comment Stoploss
Stoploss's picture

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

Thu, 01/20/2011 - 22:34 | Link to Comment sunny
sunny's picture

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

sunny

Thu, 01/20/2011 - 21:43 | Link to Comment Everyman
Everyman's picture

THATS FUNNEEEEE!

Thu, 01/20/2011 - 21:45 | Link to Comment 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 | Link to Comment muniguy
muniguy's picture

It's a cookbook!

Thu, 01/20/2011 - 22:20 | Link to Comment Cheesy Bastard
Cheesy Bastard's picture

Serling silver comment!

Thu, 01/20/2011 - 22:33 | Link to Comment docj
docj's picture

Well played!

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

I have to agree with Prof. Frink.

Thu, 01/20/2011 - 22:01 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Hephasteus
Thu, 01/20/2011 - 22:07 | Link to Comment Shell Game
Shell Game's picture

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

http://theeconomiccollapseblog.com/wp-content/uploads/2010/08/Quantitati...

Thu, 01/20/2011 - 21:56 | Link to Comment 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 | Link to Comment Amish Hacker
Amish Hacker's picture

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

Thu, 01/20/2011 - 21:54 | Link to Comment 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 | Link to Comment Cdad
Cdad's picture

Oh, good grief.

 

Thu, 01/20/2011 - 22:02 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment GoinFawr
GoinFawr's picture

Mark to SkyPie Bitchez!

Thu, 01/20/2011 - 22:02 | Link to Comment UglyPatheticPauper
UglyPatheticPauper's picture

Honestly I pictured deflation a bit differently?

Thu, 01/20/2011 - 22:04 | Link to Comment 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 | Link to Comment Cheesy Bastard
Cheesy Bastard's picture

Ben says VM=FucQ

Fri, 01/21/2011 - 01:11 | Link to Comment Hammer Down
Hammer Down's picture

Love it

Thu, 01/20/2011 - 22:08 | Link to Comment RmcAZ
RmcAZ's picture

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

http://research.stlouisfed.org/fred2/series/M2

Thu, 01/20/2011 - 22:12 | Link to Comment 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 | Link to Comment attst487
attst487's picture

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

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

that looks like my wang on viagra

Thu, 01/20/2011 - 22:35 | Link to Comment gwar5
gwar5's picture

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

 

State Bankruptcy Option Is Sought, Quietly - NYTimes.com

 

And here's a rich one by Peter Orzag, now at Citibank, and $3.5 Trillion of taxpayers money later.

 

FT.com / Comment / Opinion - America must brace itself for turbulence

 

.

Thu, 01/20/2011 - 22:18 | Link to Comment 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 | Link to Comment buzzsaw99
buzzsaw99's picture

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

Thu, 01/20/2011 - 22:58 | Link to Comment 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 | Link to Comment Tyler Durden
Tyler Durden's picture

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

Thu, 01/20/2011 - 23:05 | Link to Comment TheAkashicRecord
TheAkashicRecord's picture

This is my favorite chart M1 Money Multiplier ... pushing on a string 

http://research.stlouisfed.org/fred2/graph/?s[1][id]=MULT

 

 

Thu, 01/20/2011 - 23:09 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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

 

http://research.stlouisfed.org/fred2/categories/29

Fri, 01/21/2011 - 00:10 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment mt paul
mt paul's picture

don't worrie

they're only dollars...

Fri, 01/21/2011 - 00:56 | Link to Comment jimmyjames
jimmyjames's picture
by walküre
on Thu, 01/20/2011 - 23:10
#892367

 

"Savings rates are soaring both personal and especially businesses"

I don't think that's generally true.

*****************

Did you bother to check?

http://research.stlouisfed.org/fred2/series/WSAVNS?cid=29

http://research.stlouisfed.org/fred2/series/PSAVERT

http://research.stlouisfed.org/fred2/series/GPSAVE

http://research.stlouisfed.org/fred2/series/SAVINGS

-------------

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

http://research.stlouisfed.org/fred2/series/TSDABSNNCB

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 | Link to Comment 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 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Just because 6+ billion people are saying:

http://www.youtube.com/watch?v=I-BYzaDwNoE

doesn't mean you have to!

Fri, 01/21/2011 - 01:35 | Link to Comment jimmyjames
jimmyjames's picture

by walküre
on Thu, 01/20/2011 - 22:59
#892340

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-
http://research.stlouisfed.org/fred2/series/M2V

M1-Mult

http://research.stlouisfed.org/fred2/series/MULT

Fri, 01/21/2011 - 03:38 | Link to Comment 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 | Link to Comment mick
mick's picture

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

Fri, 01/21/2011 - 05:59 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 maybe...christmas?

Fri, 01/21/2011 - 10:56 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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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