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> Why mention stimulus when fiscal policy has nothing to do with money supply? Why, indeed. (More explicitly: I'm pretty clearly critiquing to an implicit con

> Why mention stimulus when fiscal policy has nothing to do with money supply? Why, indeed. (More explicitly: I'm pretty clearly critiquing to an implicit conflation of the two, not positing one.) > The money supply changes when the Fed decides to print money to acquire assets, which has nothing to do with congressional legislation. Just to be pedantic since this whole thing 40% defies any presumption of reasonable numeracy... this is entirely irrelevant to the bat-shit insanity 40% claim. If the Fed changed the statutory definition of M1 to now include $11 trillion that definition 100% existed previously but wasn't part of the formal statutory definition of M1. So M1 "increased" in one immediate massive instantaneous step change by exactly $11 trillion. Shocker! Again, not because anything real changed in the actual money supply. But because a bunch of money that definitely did already exist previously but wasn't part of a definition denoted by "M1" was added to the definition of "M1".

adam_arthur 5y ago
M2 is the more commonly referenced money supply figure. Have you looked at the M2 money supply lately? https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL Very obviously massive amount of money printing. Order of magnitude more than was ever done during the GFC. Roughly 30% of the money supply printed in the span of 18 months. And they keep going, every day printing billions. This was meant to be an emergency procedure to save the economy, and it made sense at the very initial stages. Now it just acts as a hyper accelerant towards wealth inequality. Yet we have many cheering it on, talking about nominal wage gains, as people become poorer in real terms. Or because their stock portfolio/house is appreciating. Unfortunately the Fed has fallen to both populism and political pressure. It's been obvious for months that the best risk adjusted policy was to begin tightening long ago. I say risk adjusted, because if they're wrong about transitory inflation, they will have to hike suddenly and induce a recession. So we risk a recession and we gained what? The economy is overheating right now, as is very obvious by retail sales being elevated 20% above baseline (resulting in shortages) and the widest gap between job openings and job seekers in history. The Fed is meant to smooth peaks and troughs in the business cycle, not pour gasoline on them.

adam_arthur 5y ago

M2 is the more commonly referenced money supply figure. Have you looked at the M2 money supply lately? https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL Very obviously massive amount of money printing. Order of magnitude more than was ever done during the GFC. Roughly 30% of the money supply printed in the span of 18 months. And they keep going, every day printing billions. This was meant to be an emergency procedure to save the economy, and it made sense at the very initial stages. Now it just acts as a hyper accelerant towards wealth inequality. Yet we have many cheering it on, talking about nominal wage gains, as people become poorer in real terms. Or because their stock portfolio/house is appreciating. Unfortunately the Fed has fallen to both populism and political pressure. It's been obvious for months that the best risk adjusted policy was to begin tightening long ago. I say risk adjusted, because if they're wrong about transitory inflation, they will have to hike suddenly and induce a recession. So we risk a recession and we gained what? The economy is overheating right now, as is very obvious by retail sales being elevated 20% above baseline (resulting in shortages) and the widest gap between job openings and job seekers in history. The Fed is meant to smooth peaks and troughs in the business cycle, not pour gasoline on them.