3 ms·
The CPI time series you provided is monthly % change. Here's M2 in those same units: https://fred.stlouisfed.org/graph/?g=1DcYJ https://fred.stlouisfed.org/gra
by greyface- 2y ago
The CPI time series you provided is monthly % change. Here's M2 in those same units: https://fred.stlouisfed.org/graph/?g=1DcYJ https://fred.stlouisfed.org/graph/?g=1DcYJ
They look pretty similar to me. Chaotic in the short term, but averaging positive between 0-1%. In other words, slow but consistent exponential growth. I didn't say anything about a discontinuity in '08, I'm not sure what point you're trying to make with that.
Edit: here they are both plotted side by side in those units: https://fred.stlouisfed.org/graph/?g=1DcZr https://fred.stlouisfed.org/graph/?g=1DcZr
- kurthr 2y agoMaybe you can see something in that noise, but I just plotted those and looked at their correlations, and it's garbage. Even looking at their sums, they have different slopes (over decades), all you can say is "number go up". The monthly correlation is junk, the yearly correlation of their sums is junk, the decade long optimally lagged correlation is junk (include 2008-2010 and it's worse). I had to look, because I wondered if there was some interesting coincidence, but there's not. Now, if what you're trying to say is that the much larger (non M2) eurodollar currency correlates to long term global growth and inflation, yeah that's true. There is a trillion $ industry maintaining that called the banking system. But the idea that eggs, oil, lumber, or rent are well correlated is not even a funny joke. Gold and bitcoin are a bit different because they are so financialized, but I wouldn't go day trading them just based on Fed stats either.