23.6% of All US Dollars Were Created in the Last Year

Mish

Money supply is on a surge. Several charts tell the story.

Money Supply Up Over $3 Trillion Since March

Money Supply Up Over $3 Trillion Since March 2020-09-28

Greatest Year-Over-Year Money Supply Surge in History 

Greatest Year-Over-Year Money Supply Surge in History 2020-09-28
Comments (63)
No. 1-24
Sechel
Sechel

if V = GDP / m2(your choice) that tells me velocity of money is way down. So what is that telling us ? Deflation or a weakening economy? I'm not sure what the Fed is hoping to accomplish here. Those dollars aren't being spent, If they are trying to further destory purchasing power it doesn't appear as i they're having much effect. Stock market keeps going up though. Maybe they want a minsky bubble. We konw the Fed's been buying massive amounts of Tresauries keeping interest rates low

PecuniaNonOlet
PecuniaNonOlet

Uncle Sam could send me $10k in cash to spend how I want but there is nothing to spend it on. Yeah I can buy a new tv but I already have 5 and there are only 2 people in my house. Travel? Where to?

Buy clothes? What for, nowhere to go.
Food? I can only eat so much.

Buy a new car? What for, i work from home now and nowhere to go.

I could go on but you get the idea. Paying down debt is what people have been doing.

borderdenizen
borderdenizen

You could take up the trombone?

Insightful post, though.

Jojo
Jojo

Money for nothing and chicks for free?

Future Saviour or False Prophet?
Economics - Global
Modern Monetary Theory (MMT) examined

KidHorn
KidHorn

Where did the money end up? Ultimately it must have ended up in banks. Unless people are hoarding bills.

Eddie_T
Eddie_T

Breathtaking, isn't it? It's a bold experiment we're conducting...and we all know (except for maybe Paul Krugman) that it can't end well..

But whaddya do? Reject capitalism and turn into a commie? I don't see that working out well.

Give away your worldly goods and enter a holy order or a Buddhist monastery or something?

My plan is to keep working so I can deal with inflation....and to buy tangible assets.

Open to other good suggestions.

Paying down debt will probably be easier when the currency is completely worthless, so paying down secured debt now ahead of schedule seems fairly wrong to me...other than the worst class of debt....like credit cards that charge high interest....No real reason to pay off mortgages on assets that are rising rapidly in dollar value.

randocalrissian
randocalrissian

Allowing for me being dense, isn't the money supply up 23.6% and total money supply in existence created this year is 16.5%? Take end value 18 TT subtract start value to get change of 3.08544 TT divided into ending value is 16.541394%. Allowing for density.

16.5% would still be a tremendously high print, one sixth of fiat in existence is brand new. What could possibly go wrong?

Sechel
Sechel

Seems all this money is just going into the stock market and not much else. The Fed doesn't seem to shoot very straight

silverdog148
silverdog148

Interesting, they are trying to increase the velocity of money, but it's not working and it's flowing into the stock market/financial products/etc. Everything has been monetized and frankly what else really is there to consume? A new iPhone, a new big screen TV, blah, blah.

This is actually increasing inequality which I don't believe they want give the appearance of. What do I want? Increased health, increased well being, increased time to pursue hobbies, etc. All of which can be achieved without buying more plastic products.

Carl_R
Carl_R

So far they pumped the money in, and it offset the fall in velocity. What happens when the velocity drifts back towards historical levels? Can the Fed withdraw it fast enough? Will they withdraw it at all?

Rocky Raccoon
Rocky Raccoon

Donald Trump may win the title of ultimate Keynesian POTUS. He does want a legacy.

Sucks for Americans who actually save their money and are responsible. Sucks for Americans with 401Ks as their dollars they think they are winning with as they fall for Trump's rhetoric don't go nearly as far.

Nickelodeon
Nickelodeon

I'm sure none of that money made it into the stock market. I wonder if Robinhooder's know what the price to earnings ratio of any of their held stocks is...or even care.

Augustthegreat
Augustthegreat

Most of those newly created money ends up into the pockets of the top 5% percentile. American capitalism is really wonderful, if you are in that 5% group.

RonJ
RonJ

"23.6% of All US Dollars Were Created in the Last Year"
"And the BLS says inflation is only 1.4%"

The FED could double the number of dollars in one year and if they buried them in a hole in the ground, it wouldn't change anything.

Martin Armstrong: "The ECB can cut rates to try to stimulate and that failed. People are hoarding cash in Europe and that creates deflation."

amigator
amigator

You have not seen anything yet... Wait til the next crisis you will probably be able to say 80% of all the dollars created occurred within the last 10 months!

nzyank
nzyank

If US doesn't have coherent fiscal policy due to Trump/Republican failed policies & politics, then all that is left is monetary policy, which is an inadequate tool for the job at hand.

Koofasa
Koofasa

Sadly I think that the money went to people like me and others who are reading this article. We save the money as our investments appreciate and we already everything we need so there is no velocity of the new dollars. I’ve never made more money in the market than I did this year. I mean it’s almost absurd the amount my money has grown. After reading this article I know that I will need these dollars when the actual inflation hits due to the rise in our money supply through stimulus.

Born2droll
Born2droll

I bought an ar15 with my stimmy check thanks Trump!

BlackCarp
BlackCarp

Can this article be updated with the latest data?
Oh, and buy Bitcoin.

BlackCarp
BlackCarp

Can this blog post be updated with the current stimulus amounts?
Oh, and buy Bitcoin.


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