4 ms·

Yes money is all a joke right now. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL

by JohnJamesRambo 5y ago

Toine 5y ago
Is that the amount of cash circulating right now ? That is terrifying...
osrec 5y ago
Is that massive jump covid related?
- comodore_ 5y ago
  I watch this every 6 months or so https://www.youtube.com/watch?v=PTUY16CkS-k https://www.youtube.com/watch?v=PTUY16CkS-k
- buster 5y ago
  I don't understand the difference but the text below particularly points out a change in measurement in May, 2020. I suppose that's the reason.
- arthurcolle 5y ago
  money printer goes brrr
- dna_polymerase 5y ago
  No, it's a change in methodology. The "money printer goes brr"-crowd is just unable to digest information.
  - leppr 5y ago
    No, that "crowd" is talking about the 30% increase in a year of M2 money supply, which is unprecedented in US history. The gymnastics going on with the M1 curve don't change that underlying fact, although it does provide a convenient strawman deflection in arguments so less informed people stop at this rebuttal and believe the whole "huge money supply increase" narrative is a hoax.
    - dna_polymerase 5y ago
      Yawn, any reason you did not link to the M2 graph at FRED? Maybe, because the bump is also a change in methodology? The money printer has been running for decades, but all of a sudden there is a problem? All that money is stuffed into equities and has no impact on inflation. But who gives a shit if one can talk about Bitcoin instead.
      - leppr 5y ago
        1. It has been linked many times in this thread. 2. No. 3. Not at a comparable rate as is evident from the graph. 4. Are equities and other assets completely disconnected from the consumer economy? Many of the new rich and retirees will cash out or take loans against their assets. 5. Economically speaking Bitcoin is inconsequential in this story. Careful using its proponents as another strawman.
jl6 5y ago
Can someone explain why x4’ing the money supply hasn’t ÷4’d the value of the dollar? Yet?
- irjustin 5y ago
  The new thinking is money supply/debt vs GDP doesn't necessarily equate to inflation.
- xiphias2 5y ago
  The banking cartel controls where the newly printed money (debt) goes first by controlling interest rates (governments, big banks, stocks, bonds and houses get the best rates near 0%, and Aftermarket and credit card customers get 30%
- adventured 5y ago
  Because the money supply didn't increase 4x. They changed the definition of M1 to include savings.
- gizmo 5y ago
  What matters is the amount of money in active circulation. If salaries all went up 4x then you’d see significant inflation across the board. The fed provides extra liquidity to banks which trickles down to the financial system, which makes stocks go up, and real estate to some extent, but it doesn’t boost the entire economy. Doing 1tn of QE and borrowing 1tn for shovel ready infrastructure spending are not equivalent. Inflation always lags behind, though, and it’s pretty likely at this point that rising inflation indicators in the coming quarters force the fed to tighten. Opinions are very much divided on this, where many are convinced the fed needs to take drastic action to keep inflation from getting out of control with another financial crisis as a result. The other mainstream view is that we’re only seeing transitory inflation right now and as long as the real economy is healthy we shouldn’t expect inflation to persist and cause carnage.
- blueblisters 5y ago
  I believe that's partially because that money is a liability on someone's balance sheet - the fed, the banks, the treasury, companies, consumers etc. As long as the Fed can use its levers to mop up excess liquidity sometime in the future, the excess money supply is not too much of a concern.
fungizid 5y ago
The steep increase at the end mostly does not reflect a change in economic fundamentals but rather banks relabeling savings accounts as transaction accounts in response to regulatory changes. If you look at M2 instead of M1, the increase disappears. More info: https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/ https://fredblog.stlouisfed.org/2021/05/savings-are-now-more... (Edit: Updated link to a more recent blog post)
- andruby 5y ago
  Still a huge jump in M2 in Feb 2020: https://fred.stlouisfed.org/series/M2NS https://fred.stlouisfed.org/series/M2NS
  - fauigerzigerk 5y ago
    Yes, but this 32% increase was not initially new money in anyone's pocket. The Fed simply replaced some treasuries and other debt on banks' balance sheets with reserves, which don't have to be backed by equity. This gave banks more wiggle room to sit out the pandemic without reducing lending at the exact wrong time. So the Fed has done its job on the way down. Now they just have to do their job on the way up as well, or this money will eventually end up as new money in someone's pocket (via new loans) and potentially create inflation.
    - annamargot 5y ago
      Potentially? Seems to me that potential is already being realized.
      - fauigerzigerk 5y ago
        I don't know how we can possibly know that. There are just too many confounding factors right now. We had this unprecedented crash that clogged up global supply chains and caused a huge shift in what people are buying. We have massive government spending increases. I don't think it's possible to work out what impact QE is having on inflation right now or whether it will indeed be transitory as the Fed believes.

Yes money is all a joke right now. https://fred.stlouisfed.org/series/M1SL https://fred.stlouisfed.org/series/M1SL

Toine 5y ago

Is that the amount of cash circulating right now ? That is terrifying...

osrec 5y ago

Is that massive jump covid related?

comodore_ 5y ago
I watch this every 6 months or so https://www.youtube.com/watch?v=PTUY16CkS-k https://www.youtube.com/watch?v=PTUY16CkS-k
buster 5y ago
I don't understand the difference but the text below particularly points out a change in measurement in May, 2020. I suppose that's the reason.
arthurcolle 5y ago
money printer goes brrr
dna_polymerase 5y ago
No, it's a change in methodology. The "money printer goes brr"-crowd is just unable to digest information.
- leppr 5y ago
  No, that "crowd" is talking about the 30% increase in a year of M2 money supply, which is unprecedented in US history. The gymnastics going on with the M1 curve don't change that underlying fact, although it does provide a convenient strawman deflection in arguments so less informed people stop at this rebuttal and believe the whole "huge money supply increase" narrative is a hoax.
  - dna_polymerase 5y ago
    Yawn, any reason you did not link to the M2 graph at FRED? Maybe, because the bump is also a change in methodology? The money printer has been running for decades, but all of a sudden there is a problem? All that money is stuffed into equities and has no impact on inflation. But who gives a shit if one can talk about Bitcoin instead.
    - leppr 5y ago
      1. It has been linked many times in this thread. 2. No. 3. Not at a comparable rate as is evident from the graph. 4. Are equities and other assets completely disconnected from the consumer economy? Many of the new rich and retirees will cash out or take loans against their assets. 5. Economically speaking Bitcoin is inconsequential in this story. Careful using its proponents as another strawman.

jl6 5y ago

Can someone explain why x4’ing the money supply hasn’t ÷4’d the value of the dollar? Yet?

irjustin 5y ago
The new thinking is money supply/debt vs GDP doesn't necessarily equate to inflation.
xiphias2 5y ago
The banking cartel controls where the newly printed money (debt) goes first by controlling interest rates (governments, big banks, stocks, bonds and houses get the best rates near 0%, and Aftermarket and credit card customers get 30%
adventured 5y ago
Because the money supply didn't increase 4x. They changed the definition of M1 to include savings.
gizmo 5y ago
What matters is the amount of money in active circulation. If salaries all went up 4x then you’d see significant inflation across the board. The fed provides extra liquidity to banks which trickles down to the financial system, which makes stocks go up, and real estate to some extent, but it doesn’t boost the entire economy. Doing 1tn of QE and borrowing 1tn for shovel ready infrastructure spending are not equivalent. Inflation always lags behind, though, and it’s pretty likely at this point that rising inflation indicators in the coming quarters force the fed to tighten. Opinions are very much divided on this, where many are convinced the fed needs to take drastic action to keep inflation from getting out of control with another financial crisis as a result. The other mainstream view is that we’re only seeing transitory inflation right now and as long as the real economy is healthy we shouldn’t expect inflation to persist and cause carnage.
blueblisters 5y ago
I believe that's partially because that money is a liability on someone's balance sheet - the fed, the banks, the treasury, companies, consumers etc. As long as the Fed can use its levers to mop up excess liquidity sometime in the future, the excess money supply is not too much of a concern.

fungizid 5y ago

The steep increase at the end mostly does not reflect a change in economic fundamentals but rather banks relabeling savings accounts as transaction accounts in response to regulatory changes. If you look at M2 instead of M1, the increase disappears. More info: https://fredblog.stlouisfed.org/2021/05/savings-are-now-more-liquid-and-part-of-m1-money/ https://fredblog.stlouisfed.org/2021/05/savings-are-now-more... (Edit: Updated link to a more recent blog post)

andruby 5y ago
Still a huge jump in M2 in Feb 2020: https://fred.stlouisfed.org/series/M2NS https://fred.stlouisfed.org/series/M2NS
- fauigerzigerk 5y ago
  Yes, but this 32% increase was not initially new money in anyone's pocket. The Fed simply replaced some treasuries and other debt on banks' balance sheets with reserves, which don't have to be backed by equity. This gave banks more wiggle room to sit out the pandemic without reducing lending at the exact wrong time. So the Fed has done its job on the way down. Now they just have to do their job on the way up as well, or this money will eventually end up as new money in someone's pocket (via new loans) and potentially create inflation.
  - annamargot 5y ago
    Potentially? Seems to me that potential is already being realized.
    - fauigerzigerk 5y ago
      I don't know how we can possibly know that. There are just too many confounding factors right now. We had this unprecedented crash that clogged up global supply chains and caused a huge shift in what people are buying. We have massive government spending increases. I don't think it's possible to work out what impact QE is having on inflation right now or whether it will indeed be transitory as the Fed believes.