5 ms·

USD has this little problem and it hasn’t even begun to manifest yet. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL

SantalBlush 5y ago
This chart only looks like a problem for those who don't understand what the Fed does.
eloff 5y ago
Maybe, maybe not. Time will tell. This has been happening since 2008 with no serious repercussions.
- rawtxapp 5y ago
  My car's "check engine" light has been on for a while now, but it still runs with no serious repercussions, guess I can ignore it. You see how that logic would be flawed?
  - imtringued 5y ago
    In this case the check engine light has been on because you have been running your engine on too little oil (inflation).
    - rawtxapp 5y ago
      Well if I keep running it like this for long enough, the engine might end up being destroyed beyond point of no return is the point I guess.
  - eloff 5y ago
    Maybe it's just the light that's broken. The loose monetary policy might cause higher than desired inflation and the Fed might lose control of it. But we said that in 2008 and it didn't happen. We might be wrong again.
PragmaticPulp 5y ago
No, that graph only shows a discontinuity because the definition of M1 money supply was changed on that date. They explained it fully here: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec... Sharing the graph without the context is misleading.
- deleted 5y ago
  [deleted]
- nairboon 5y ago
  But the money was still printed as you see in the M2 supply: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
  - atq2119 5y ago
    I seriously doubt that the money was printed. It's all electronic nowadays. There's so much confusion and cargo-culting around money, it would serve as well to use accurate language. The money was created, but not printed. This is significant because "printing" evokes a picture of the money being distributed to people who then spend it, which is not quite the case here.
    - Acrobatic_Road 5y ago
      It makes no difference whether the money was printed or "created".
      - imtringued 5y ago
        It makes a huge difference because creating money follows regulations, "printing money" means you are ignoring those regulations.
      - SantalBlush 5y ago
        Actually, it makes an enormous difference. The supply of money that is created by banks can be increased and decreased through Fed operations. That means when inflation becomes a threat, the Fed can reduce the money supply, thereby reducing the money in circulation and reducing inflation risks. Seriously, this is one of the Fed's primary tasks, to control inflation through monetary policy. It's sad how many people on HN fail to understand this.
imtringued 5y ago
It's two charts stitched together. You can't really read anything into it. Yes, the chart is useless for periods spanning over Feb 2020 to Jun 2020 and it should make you suspicious but not because because of the actual information being presented, rather you should be suspicious because messing with the charts makes it difficult to see what is being hidden.

SantalBlush 5y ago

This chart only looks like a problem for those who don't understand what the Fed does.

eloff 5y ago

Maybe, maybe not. Time will tell. This has been happening since 2008 with no serious repercussions.

rawtxapp 5y ago
My car's "check engine" light has been on for a while now, but it still runs with no serious repercussions, guess I can ignore it. You see how that logic would be flawed?
- imtringued 5y ago
  In this case the check engine light has been on because you have been running your engine on too little oil (inflation).
  - rawtxapp 5y ago
    Well if I keep running it like this for long enough, the engine might end up being destroyed beyond point of no return is the point I guess.
- eloff 5y ago
  Maybe it's just the light that's broken. The loose monetary policy might cause higher than desired inflation and the Fed might lose control of it. But we said that in 2008 and it didn't happen. We might be wrong again.

PragmaticPulp 5y ago

No, that graph only shows a discontinuity because the definition of M1 money supply was changed on that date. They explained it fully here: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-recent-surge-in-the-m1-money-supply/ https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec... Sharing the graph without the context is misleading.

deleted 5y ago
[deleted]
nairboon 5y ago
But the money was still printed as you see in the M2 supply: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
- atq2119 5y ago
  I seriously doubt that the money was printed. It's all electronic nowadays. There's so much confusion and cargo-culting around money, it would serve as well to use accurate language. The money was created, but not printed. This is significant because "printing" evokes a picture of the money being distributed to people who then spend it, which is not quite the case here.
  - Acrobatic_Road 5y ago
    It makes no difference whether the money was printed or "created".
    - imtringued 5y ago
      It makes a huge difference because creating money follows regulations, "printing money" means you are ignoring those regulations.
    - SantalBlush 5y ago
      Actually, it makes an enormous difference. The supply of money that is created by banks can be increased and decreased through Fed operations. That means when inflation becomes a threat, the Fed can reduce the money supply, thereby reducing the money in circulation and reducing inflation risks. Seriously, this is one of the Fed's primary tasks, to control inflation through monetary policy. It's sad how many people on HN fail to understand this.

imtringued 5y ago

It's two charts stitched together. You can't really read anything into it. Yes, the chart is useless for periods spanning over Feb 2020 to Jun 2020 and it should make you suspicious but not because because of the actual information being presented, rather you should be suspicious because messing with the charts makes it difficult to see what is being hidden.