Ⓥ EconomicsJunkie » money supply growth

Money Supply Growth – July 2009

Nima — Fri, 14 Aug 2009 06:06:49 +0000

The true money supply has dropped to $2.157 trillion in July 2009 from $2.172 in June 2009. It is still up 14% from 1 year ago, but annual growth has slowed down from 15.3% in June.

Money Supply Growth – May 2009

Nima — Sun, 14 Jun 2009 02:36:32 +0000

The true money supply has dropped from $2.135 trillion to $2.123 trillion, but is still up 13.07% when compared to one year ago.

US Money Supply – February 2009

Nima — Fri, 13 Mar 2009 17:04:15 +0000

Click on image to enlarge.

The annual true money supply growth has dropped to 12.15 % in February 2009. The total True Money Supply has now dropped two months in a row. From $2.16 trillion in December to $2.094 trillion in January, and now to $2.046 trillion in February. So far this is in line with my recent expectations.

Money Supply Growth – December 2008

Nima — Fri, 16 Jan 2009 08:54:58 +0000

Click on image to enlarge.

The money supply has grown by 15.85% in December of 2008 when compared to December 2007. It has now grown to $2.16 trillion. This data still supports the thesis that asset prices might bottom out between the end of 2009 and mid 2010.

To be sure, this is an estimation. The number for retail sweeps for December is not out yet. This number is usually published with a 2 month time lag. This is all the more noteworthy since a dramatic change has occurred in the development of retail sweeps in October and November of 08. For the first time ever retail sweeps have begun to drop significantly.

This level of growth is almost at the record levels of 1997. It is of course a direct outcome of the government’s disastrous spending spree that is setting the stage for a hyperinflation or at least another asset bubble, once the credit contraction is over.

It is amazing that while Hank Paulson, Ben Bernanke, Barack Obama and others are touting the necessity of more regulation, they themselves are blithely cheering on an out of control money supply inflation, which was of course what caused the credit crisis in the first place. If anyone needs more regulation it is these people.

We need more regulation of the government by the people, more regulation of the Federal Reserve Bank, the Department of Treasury, and Congress. What steps has Congress taken to restrain government spending? Nancy Pelosi, the most clueless out of all of them, just proudly announced another $850 billion and called it “pretty exciting”. Please consider House Minority Leader Boehner’s appropriate response.

Of course the politicians don’t have this kind of regulation in mind. They think they need yet more power in order to regulate private business. They think the government needs to grow even more than it already has. The public is in full compliance with this nonsense. What a mess. Who protects us from our government if not a vigilant public?

The reserve ratio is beginning to adjust as expected. There is still plenty of room for the money supply to explode. As I mentioned, in order for the ratio to get back to regular levels, the money supply approximately needs to triple. Now that has changed. Bank reserves are now at $820 billion. If the reserve ratio adjusts to regular levels without a drop in reserves, the money supply would need to rise to roughly $8 trillion.

Money Supply Growth – November 2008

Nima — Fri, 12 Dec 2008 06:22:17 +0000

Click on image to enlarge.

The true money supply has grown by 12% over the past year to now about $2.07 trillion. The enormous increase of the monetary base is now spilling over to private bank accounts. The effects can already be seen in a resurgence of gold and silver. Due to the unprecedented increase of the monetary base I don’t see an end to this trend anytime soon. Welcome back, inflation!

US Money Supply Growth October 2008 – By Component

Nima — Wed, 19 Nov 2008 07:37:27 +0000

As mentioned in Money Supply October 2008, the money supply has grown by $150 billion or 8% from October 2007 through October 2008.

Upon request, I am listing the contribution of each money supply component to this growth:

Click image to enlarge.

Based on this chart, the most significant contribution to this growth has been in domestic private and business checking accounts ($85.3 billion or 57%), which needs to be calculated by adding up retail sweeps and demand deposits, followed by a growth of $29 billion or 19% in cash and an equal amount in government deposits at the Federal Reserve.

The contribution of government deposits at commercial banks, government note balances at repositories, and deposits of foreign banks and institutions has been negligible.

Money Supply – September 2008

Nima — Tue, 18 Nov 2008 09:50:52 +0000

The final money supply data for September indicates that the US money supply did not grow as much as we expected based on data provided during the month of September. The annual growth has barely exceeded 3%. It has grown to $1.93 trillion. However, the deflationary tendency cannot yet be considered as broken, further corrections in asset, commodity, consumer prices and a further strengthening of the dollar can be expected, unless the money supply growth once again increases this month.