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You're wrong. Look at this graph: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL or https://fred.stlouisfed.org/graph/?g=1iSvr
by wakawaka28 3y ago
You're wrong. Look at this graph: https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL or https://fred.stlouisfed.org/graph/?g=1iSvr https://fred.stlouisfed.org/graph/?g=1iSvr M2 isn't shrinking much, and it certainly increased throughout 2021. I would point you to M3 as well but that series was discontinued.
- bryanlarsen 3y agoDropping a $trillion isn't shrinking much? And remember that the economy has been growing the whole time. If the economy grows while the money supply stays constant then it is effectively a shrink of the money supply since a constant amount has to spread across more activity.
- wakawaka28 3y agoThe economy has not been growing the whole time. It effectively collapsed during the pandemic, went offline, and restarted at lower capacity afterward. GDP also counts government spending, which is misleading as the government is not producing anything it purchases. As for the 1 trillion drop, if you look at the preceding 5 trillion dollar increase you'll see that 1 trillion is very conservative.
- bryanlarsen 3y agoThe economy grows about $1T per year, and therefore so should the money supply. We're up net $4T over 4 years. That's about right.
- wakawaka28 3y agoIt only took a $12 trillion increase in government debt since 2020 to produce that "growth" lol