Money Supply Up Over $3 Trillion Since March
Greatest Year-Over-Year Money Supply Surge in History
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23.6% of All US Dollars Were Created in the Last Year
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Dude that is freaking insane..
Lol yeah let’s see how high that number is now!!
Can this blog post be updated with the current stimulus amounts?
Oh, and buy Bitcoin.
Can this article be updated with the latest data?
Oh, and buy Bitcoin.
I bought an ar15 with my stimmy check thanks Trump!
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.
‘Debauching the currency is the easy was to overthrow a government.” Marx.
The military is by far getting its military Keynesianism.
Just looking for comments on this:
I’d say the Congress is sure to create a LOT more debt to auction off…just a matter of how long they can get away with dragging their feet. The election is obviously taking people’s minds off the looming crash that anybody with a brain sees coming. That will soon be behind us, and the pressure will be applied to both parties (not by us plebes, but by people whose opinion counts) to flat-out print a couple more trillion.
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.
Treasury can mint those $2Trillion platinum coins, Congress can tell Fed to hit the key and print unlimited amount if that’s what they want.
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!
“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.”
another reason to allow ALL CORPORATIONS to go bankrupt
it will REDUCE debt(turned into phantom equity)
corporations porked out on $6,000,000,000,000 of new debt in past 10 years
time to BLOW IT UP
Sechel wrote
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?
what it says is that 1% is hoarding/saving it – likely RE-POSITIONING it outside merica
99% tend to spend spend spend it
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.
You mean the top .05 percentile…there, fixed it for ya.
Did I mention how much money Mnuchin made off the 2008 bailout? LOL.
It goes all the way back
Gary North:
Economic Fascism
At the heart of the ruling elite’s power is a politically untouchable elitist institution which controls the central institution: money.
This goes back to Alexander Hamilton in 1791.
The first fascist agency in post-Constitution history was the First Bank of the United States, open for business 1791.
In 1791, the United States government created the Bank of the United States. It was a privately owned central bank. It was a monopoly. It bought government bonds with counterfeit but legal money. It earned money on the interest payments.
In 1816, a second Bank of the United States was created. It was the same scam: counterfeit money to buy government bonds and anything else it wanted to buy. It earned money on the interest.
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.
No….I doubt fundamental analysis is real big with Robinhood traders.
My wife doesn’t trade stocks..but she’s been telling me to buy Tesla for years….I keep saying they’ve never made a dime in profit….and she keeps watching it go up and wondering how I can be so dumb.
As far as where he money wen……I’ve sure seen a lot of brand new $175K Mastercrafts on the lake this year.
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.
Trump will get blamed…..but is he really responsible?….
Not really. I dislike Trump, but what happened would have happened no matter who was President…..
It isn’t just the buck that stops in the Oval Office. They should have a little plaque like Truman’s that says “The Blame Stops Here”.
Part of the problem….no sane person would ever desire the office of POTUS.
He has begged for all of this. Go and read the tweets after attacking Obama for this very same monetary policy. Trump pre 2017 attacked this monetary policy. 2017 Trump began playing victim to the Fed not easing enough.
So calling his the ultimate Keynesian POTUS doesn’t place all the blame on him, but his fingers are dirty.
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?
No, they do not need to withdraw it at all. The scenario were they would withdrawal would be in a hot inflation scenario but that’s been theorized for so long that I don’t believe this a realistic possibility at this point, the government has gone all in on the economy, with the backing of the reserve currency.
Inflation is there whether they say it is or not. Mis-measuring inflation just means you get blindsided when it goes double digits.
And no, once it takes off big- time, it’s very hard to stop.
The Fed has been able to get way with printing because there are big dis-inflationary forces at work in the world…since we turned into a digital world…..but does that mean inflation can’t happen? I really don’t think that’s right either.
I am not a hyper-inflationist…..people point out rightly that it’s hard to cause a hyperinflation in the world’s reserve currency…..I reckon we are not quite at the end game. But garden variety stagflation? I think that’s very possible.
I think the Fed imagines that the money can be withdrawn and voided through taxation, as all spending is taxed. I am in the UK purchase tax is 20%, considering that alone on the 5th iteration of spending a cumulative 70% tax on the initial amount. More can withdrawn through hidden taxation and income tax. Personally I don’t see any sudden loss in confidence but I see a slow burn of inflation because you pretty much never see anybody who wants to hold money as a long term plan. Then of course you get mandatory pension savings in government bonds, already over here and I guess arriving on a state by state basis in the US.
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.
As Mish pointed out recently, the velocity of money is now a fairly meaningless metric.
It just looks really ominous when it falls so fast…just about has to scare the bejeezus out of the Fed, regardless of what they let on.
The printing has to spark inflation….we already have had much more than the Fed says….they just jacked the metrics so bad on that….they can’t properly measure it anymore…..
Or, alternately, they like to lie about it so they can keep printing (I have my own idea about which one of those is the more likely explanation…wanna guess which one?)
They were trying to keep the bond market from collapsing. If people don’t have money, debts get defaulted on and the value of the debts goes down in value. To compound matters, much of the debt is used for collateral on other debts, so if the collateral goes down in value, many of the debts are forced to be paid back and if they can’t be paid back, even more debt is defaulted on and the cycle keeps growing.
Seems all this money is just going into the stock market and not much else. The Fed doesn’t seem to shoot very straight
I wouldn’t put a nickel in the stock market now. Other than a few small trades I took for fun, I haven’t owned a stock since about 2009. Stocks can go to the moon…but the market is not stable…and stocks have no intrinsic value. Too much risk for this old man.
Idk, they shot pretty straight so far, straight to the stock market.
Except the stock market doesn’t actually hold any money. The money goes from buyer to seller.
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?
divide by starting value, not ending
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.
Steer clear of California with that cash flow potential rental property!
Yeah..I should have mentioned that market matters.
We specialize in transitional housing for ex-Californians…they have been moving here steadily since the early 90’s..and now the tide is at the flood. Tesla and Apple both building huge new campuses here as we speak.
I come to Cali to soak in my favorite hot springs and drink pint noir…and then go home.
I love California….I .just hate what the fires have done….so terrible. The places I love the most will never be what they were….in my lifetime.
Where did the money end up? Ultimately it must have ended up in banks. Unless people are hoarding bills.
it went to the holders of all those treasury bonds the Fed bought
What did they do with the proceeds?
Billionaires’ wealth rises to $10.2 trillion amid Covid crisis
Mish, correct me if I am wrong, but dont we have a debt based currency….where theoretically debt itself should be included in the money supply. If so, the retirement of debt destroys the currency, so more base money needs to be created to replace it. Of course this base money goes somewhere, either into bank reserves or asset values (ie stock, housing, trading cards, etc).
Of course, the Fed and Treasury are colluding in basically monetizing the federal spending trough….we create bonds, you buy them with cash. I guess that’s different than just printing money…..not
Money for nothing and chicks for free?
Future Saviour or False Prophet?
Economics – Global
Modern Monetary Theory (MMT) examined
thanks for the link.
Believers in fiat money salvation
Before the Modern Monetary Theory
TAXES FOR REVENUE ARE OBSOLETE
by Beardsley Ruml, Chairman of the Federal Reserve Bank of New York.
You could take up the trombone?
Insightful post, though.
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
Their buddies are making massive amounts of money with essentially zero risk. Have been since the last crisis.
Please tell me you don’t truly believe these guys are looking out for “Joe America”.
Inflation will be a problem after the deflationary impulse runs its course.
When the dollars start coming out to play all bets are off as to what CPI will be.
Actually all bets are not off. You are welcome to bet on this, many people do, with billions of dollars. Maybe you’re right and they are all wrong, though. It’s possible.
People want to hold more money, and the Fed has to accommodate them if they want to sustain spending levels and avoid a deflationary recession.
The exponential increase is not an increase in money supply – it is a result of Fed now including saving accounts in their calculations. M1 (money supply) is now discontinued so now we have Money Stock aggregate. “….Consequently, today’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….” https://www.federalreserve.gov/feeds/h6.html