4 ms·

The US Dollar M1 money supply increased by 66.5% and M2 by 25.4% between Dec 2019 and Dec 2020 [0]. I'd give you more current data, but the Fed stopped reportin

by vdqtp3 5y ago

The US Dollar M1 money supply increased by 66.5% and M2 by 25.4% between Dec 2019 and Dec 2020 [0]. I'd give you more current data, but the Fed stopped reporting the overall changes and M2 in general in early 2021. The ostensible reasons for that depend on how tight your tinfoil hat is, but plenty of money is created by the Fed, and that number hit trillions in the last 18 months. 0: https://www.federalreserve.gov/releases/h6/20210128/ https://www.federalreserve.gov/releases/h6/20210128/

onlyrealcuzzo 5y ago
The Fed is still reporting M3: https://fred.stlouisfed.org/series/MABMM301USM189S https://fred.stlouisfed.org/series/MABMM301USM189S It's "only" up 31.76% since Fed 2020 / before they started messing around. It was already regularly increasing by ~7% per year - so you'd expect close to a ~10% difference. So we've got about ~20% more M3 than you would otherwise expect. If they're trying to cover up data, they're doing a bad job.
- vdqtp3 5y ago
  Thanks for the info. I had been referring to the Fed's weekly releases, which didn't include that. I went to look into why, and found "Since 2006, M3 is no longer tracked by the Federal Reserve. ... However, the Federal Reserve Bank of St. Louis and some other sources still publish M3 figures for economic data purposes" Regardless, 7% is already ridiculous, and over 20% beyond that is absurd.
throw0101a 5y ago
> The US Dollar M1 money supply increased by 66.5% […] Are you aware of the regulatory reporting change in regards to M1? * 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... > […] but plenty of money is created by the Fed, and that number hit trillions in the last 18 months. No: it, at most, creates bank reserve deposits: > The story usually says that the Fed sets a quantity of reserves and banks then multiply those reserves into loans meaning that the Fed has a direct control over the quantity of money being created. But the financial crisis proved that this theoretical view is precisely backwards. In fact, banks make loans first and find reserves after the fact. In other words, the Fed accommodates the quantity of loans by supplying the necessary quantity of reserves. As a result, the money multiplier that we all learn in school is wrong and the Fed has no direct control over the quantity of loans/deposits issued meaning that the predominant form of money (deposits) is controlled almost entirely by private banks and not the Central Bank. * https://www.pragcap.com/common-myths-about-the-federal-reserve/ https://www.pragcap.com/common-myths-about-the-federal-reser... However, US reserve requirements were set to zero in March 2020, so banks could create loans more easily: * https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm But there's nothing special about reserve requirements being zero: e.g., Canada has been at that level since 1992: * https://en.wikipedia.org/wiki/Reserve_requirement#Canada https://en.wikipedia.org/wiki/Reserve_requirement#Canada Just because the Fed reports on things like the various 'M' statistics does not mean that they have a large effect on them. The private banking industry, through credit/loans, is where the majority of money is created. I direct you to Cullen Roche's paper "Understanding the Modern Monetary System", which is explains how things work in 2021, and not how they used to work in like 1921: > In understanding inside money and outside money, one must also understand that it is the banks who “rule the monetary roost” so to say. That is, banks issue almost all of the money in circulation today in the form of loans and the government is designed primarily to support this privatized money creation source. Contrary to popular belief, the government does not issue or “print money” (except in the most literal sense, ie, the US Treasury prints notes to meet demand for use at private banks by bank customers who have accounts in inside money). The government is only the issuer of outside money which is designed to facilitate and support the use of inside money * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 A good interview with Roche on the Rational Reminder podcast from a few months ago: * https://rationalreminder.ca/podcast/132 https://rationalreminder.ca/podcast/132 * https://www.youtube.com/watch?v=uZi4QE_EfCw https://www.youtube.com/watch?v=uZi4QE_EfCw
- onlyrealcuzzo 5y ago
  But the government can almost literally print money and did this time. If the government sends people stimulus checks, pays for that with deficit spending, and that debt is monetized by the Fed purchasing it... You had money that did not exist, that the Fed created on its spreadsheet to buy Treasuries to finance the Federal government... Sending people checks, unemployment, and businesses paycheck protection. AFAIK, this was >$2T of the Federal Reserve's ~$7T balance sheet increase (~30%). In normal times, the Federal government deficit spends, but the Federal Reserve's balance sheet does not increase to finance that. Although the deficit is not paid for by taxes, the money created is not coming from the Federal Reserve. In this case, almost all of it did.

by vdqtp3 5y ago

onlyrealcuzzo 5y ago

The Fed is still reporting M3: https://fred.stlouisfed.org/series/MABMM301USM189S https://fred.stlouisfed.org/series/MABMM301USM189S It's "only" up 31.76% since Fed 2020 / before they started messing around. It was already regularly increasing by ~7% per year - so you'd expect close to a ~10% difference. So we've got about ~20% more M3 than you would otherwise expect. If they're trying to cover up data, they're doing a bad job.

vdqtp3 5y ago
Thanks for the info. I had been referring to the Fed's weekly releases, which didn't include that. I went to look into why, and found "Since 2006, M3 is no longer tracked by the Federal Reserve. ... However, the Federal Reserve Bank of St. Louis and some other sources still publish M3 figures for economic data purposes" Regardless, 7% is already ridiculous, and over 20% beyond that is absurd.

throw0101a 5y ago

> The US Dollar M1 money supply increased by 66.5% […] Are you aware of the regulatory reporting change in regards to M1? * 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... > […] but plenty of money is created by the Fed, and that number hit trillions in the last 18 months. No: it, at most, creates bank reserve deposits: > The story usually says that the Fed sets a quantity of reserves and banks then multiply those reserves into loans meaning that the Fed has a direct control over the quantity of money being created. But the financial crisis proved that this theoretical view is precisely backwards. In fact, banks make loans first and find reserves after the fact. In other words, the Fed accommodates the quantity of loans by supplying the necessary quantity of reserves. As a result, the money multiplier that we all learn in school is wrong and the Fed has no direct control over the quantity of loans/deposits issued meaning that the predominant form of money (deposits) is controlled almost entirely by private banks and not the Central Bank. * https://www.pragcap.com/common-myths-about-the-federal-reserve/ https://www.pragcap.com/common-myths-about-the-federal-reser... However, US reserve requirements were set to zero in March 2020, so banks could create loans more easily: * https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm But there's nothing special about reserve requirements being zero: e.g., Canada has been at that level since 1992: * https://en.wikipedia.org/wiki/Reserve_requirement#Canada https://en.wikipedia.org/wiki/Reserve_requirement#Canada Just because the Fed reports on things like the various 'M' statistics does not mean that they have a large effect on them. The private banking industry, through credit/loans, is where the majority of money is created. I direct you to Cullen Roche's paper "Understanding the Modern Monetary System", which is explains how things work in 2021, and not how they used to work in like 1921: > In understanding inside money and outside money, one must also understand that it is the banks who “rule the monetary roost” so to say. That is, banks issue almost all of the money in circulation today in the form of loans and the government is designed primarily to support this privatized money creation source. Contrary to popular belief, the government does not issue or “print money” (except in the most literal sense, ie, the US Treasury prints notes to meet demand for use at private banks by bank customers who have accounts in inside money). The government is only the issuer of outside money which is designed to facilitate and support the use of inside money * https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1905625 A good interview with Roche on the Rational Reminder podcast from a few months ago: * https://rationalreminder.ca/podcast/132 https://rationalreminder.ca/podcast/132 * https://www.youtube.com/watch?v=uZi4QE_EfCw https://www.youtube.com/watch?v=uZi4QE_EfCw

onlyrealcuzzo 5y ago
But the government can almost literally print money and did this time. If the government sends people stimulus checks, pays for that with deficit spending, and that debt is monetized by the Fed purchasing it... You had money that did not exist, that the Fed created on its spreadsheet to buy Treasuries to finance the Federal government... Sending people checks, unemployment, and businesses paycheck protection. AFAIK, this was >$2T of the Federal Reserve's ~$7T balance sheet increase (~30%). In normal times, the Federal government deficit spends, but the Federal Reserve's balance sheet does not increase to finance that. Although the deficit is not paid for by taxes, the money created is not coming from the Federal Reserve. In this case, almost all of it did.