Taps Coogan – December 30th, 2020
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The year-over-year growth growth rate of the M1 money supply just keeps pushing relentlessly higher. As of the most recent data from mid-December, it is running at a 69%, the highest rate on record by a country mile.
M1 money, the narrowest measure of the money supply, includes cash, coins, savings/checking accounts, and similar types of money. M2 and MZM, broader measures of the money supply, remain near-or-at record growth rates as well, albeit lower than M1.
We keeping reporting on the acceleration in the money supply because every few weeks the numbers just keep pushing into previously unimaginable territory. These kinds of growth rates are simply historic.
Furthermore, whereas prior QE programs did not have a clearly observable impact on the money supply, today is different. The fusion of QE-Infinity and Congressional stimulus/transfer payments (helicopter money) is translating directly into the money supply. The argument that because prior QE programs didn’t create more consumer inflation, QE-Infinity won’t either should be treated very skeptically.
Keep in mind that all of these figures predate the most recent stimulus bill and, of course, any follow up bill to push the transfer payment checks to $2,000.
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