3 ms·

Conspiracy theory?[0] [0]https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL

webinvest 5y ago
18880 to 21200 this year is a 12.78% increase. Last year 2020, it said M2 grew 25%. It’s notable that the calculation for M2 changed. “Before May 2020, M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000)” “Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000)” Does that mean savings accounts and money market accounts are no longer included in M2?
- Majromax 5y ago
  From https://www.federalreserve.gov/feeds/h6.html https://www.federalreserve.gov/feeds/h6.html >> Consequently, [February 23 2021]'s H.6 statistical release combines release items "Savings deposits" and "Other checkable deposits" retroactively back to May 2020 and includes the resulting sum, reported as "Other liquid deposits," in the M1 monetary aggregate. This action increases the M1 monetary aggregate significantly while leaving the M2 monetary aggregate unchanged.
  - webinvest 5y ago
    Okay so they were moved to M1 —- which is included in M2 so M2 aggregate is unchanged.
hervature 5y ago
I'm not sure what exactly you are trying to point out? The jump in 2020? The exponential curve? The exponential curve is inflation in action. That is, 1.03^x is an exponential function that represents the 3% inflation target. I think the jump wouldn't even be noticed by laymen. But, my two cents, is that I think modern monetary theory (a contested theory) would say that printing money to control unemployment does not necessarily lead to inflation. This is kind of what we're seeing?
- willcipriano 5y ago
  The nearly vertical line over the past two years, yes. I don't think you can call simple supply and demand a conspiracy theory. If MMT theorists said that wouldn't cause inflation, I'd call that a conspiracy theory soundly disproven[0]. [0]https://www.pbs.org/newshour/economy/u-s-consumer-prices-spiked-6-2-percent-in-past-year-highest-inflation-rate-since-1990 https://www.pbs.org/newshour/economy/u-s-consumer-prices-spi...
  - the_gastropod 5y ago
    This take is the equivalent of taking a snowball into the halls of congress to refute climate change. We're in the midst of a global pandemic that's had dramatic impacts on international supply chains. Of course prices are volatile. To use this as evidence of the general "LOL PRINTER GO BRRR, SO INFLATION" argument—that, frankly, is a conspiracy theory popular today because of everyone's sudden infatuation with Austrian economics via Bitcoin obsession—is kinda myopic and missing the point.
    - willcipriano 5y ago
      My thesis is simple and has remained unchanged since early 2020 when the printing began. Creation of additional currency without the creation of additional demand reduces its value relative to other goods. To your point, a global economic shutdown would to my mind reduce demand for currency, therefore the creation of money in the past few years will cause inflation particularly as velocity picks back up[0]. I could be wrong, but that's a conspiracy theory? Like bigfoot or the moon landing? Come on. Your ideas can't be that fragile to have to resort to name calling like that. [0]https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
  - kergonath 5y ago
    It’s an exponential, it’s going to look vertical for any sufficiently long time scale, but if you look at it over the last 20 years instead of 60 it’s not vertical anymore. That’s what inflation does over the long term, nothing nefarious there.
  - 5y ago

18880 to 21200 this year is a 12.78% increase. Last year 2020, it said M2 grew 25%. It’s notable that the calculation for M2 changed. “Before May 2020, M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000)” “Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000)” Does that mean savings accounts and money market accounts are no longer included in M2?

Majromax 5y ago
From https://www.federalreserve.gov/feeds/h6.html https://www.federalreserve.gov/feeds/h6.html >> Consequently, [February 23 2021]'s H.6 statistical release combines release items "Savings deposits" and "Other checkable deposits" retroactively back to May 2020 and includes the resulting sum, reported as "Other liquid deposits," in the M1 monetary aggregate. This action increases the M1 monetary aggregate significantly while leaving the M2 monetary aggregate unchanged.
- webinvest 5y ago
  Okay so they were moved to M1 —- which is included in M2 so M2 aggregate is unchanged.

hervature 5y ago

I'm not sure what exactly you are trying to point out? The jump in 2020? The exponential curve? The exponential curve is inflation in action. That is, 1.03^x is an exponential function that represents the 3% inflation target. I think the jump wouldn't even be noticed by laymen. But, my two cents, is that I think modern monetary theory (a contested theory) would say that printing money to control unemployment does not necessarily lead to inflation. This is kind of what we're seeing?

willcipriano 5y ago
The nearly vertical line over the past two years, yes. I don't think you can call simple supply and demand a conspiracy theory. If MMT theorists said that wouldn't cause inflation, I'd call that a conspiracy theory soundly disproven[0]. [0]https://www.pbs.org/newshour/economy/u-s-consumer-prices-spiked-6-2-percent-in-past-year-highest-inflation-rate-since-1990 https://www.pbs.org/newshour/economy/u-s-consumer-prices-spi...
- the_gastropod 5y ago
  This take is the equivalent of taking a snowball into the halls of congress to refute climate change. We're in the midst of a global pandemic that's had dramatic impacts on international supply chains. Of course prices are volatile. To use this as evidence of the general "LOL PRINTER GO BRRR, SO INFLATION" argument—that, frankly, is a conspiracy theory popular today because of everyone's sudden infatuation with Austrian economics via Bitcoin obsession—is kinda myopic and missing the point.
  - willcipriano 5y ago
    My thesis is simple and has remained unchanged since early 2020 when the printing began. Creation of additional currency without the creation of additional demand reduces its value relative to other goods. To your point, a global economic shutdown would to my mind reduce demand for currency, therefore the creation of money in the past few years will cause inflation particularly as velocity picks back up[0]. I could be wrong, but that's a conspiracy theory? Like bigfoot or the moon landing? Come on. Your ideas can't be that fragile to have to resort to name calling like that. [0]https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
- kergonath 5y ago
  It’s an exponential, it’s going to look vertical for any sufficiently long time scale, but if you look at it over the last 20 years instead of 60 it’s not vertical anymore. That’s what inflation does over the long term, nothing nefarious there.
- 5y ago