You’re correct that the recent uptick is unprecedented, but given that the other graph (shared by Nobel prize winning economist) shows no stable relationship between M2 and inflation, why does it matter? He might be wrong and you might be right, but that graph alone doesn’t tell that story.
These morons are trying to pump a certain crypto-token by instilling inflation fears, but since inflation has been a non-issue in the US since the 1970s, they are now trying to shift the focus to the money supply as if it had any relevance at all.
It describes a very sharp increase in created money. The poster of the linked tweet is implying this is unique and we will see negative economic effects (like inflation) because of it.
Parent to that tweet is arguing we have not seen those effects despite past federal reserve action and so there is no worry.
The wider context to this conversation is that some people [who?] believe federal reserve policy is flawed and supported by systemic bias in the reporting of economic indicators like GDP.
There is no one definition of "money". M0, M1, M2, M3, MZM are various metrics which have been proposed over time for trying to track the supply of USD all with varying definitions. M2 is frequently used as the simplest and best general case proxy for "how much USD is out in circulation" in a way that tracks credit + currency.
So saying the M2 is high relative to population means that we have been "printing money" (increasing the USD money supply) at a high rate relative to population.
M2 is a measure of the money supply. There are different measures of the money supply, which roughly speaking are M0 (cash), M1 (M0+current accounts), M2 (M1+savings accounts) and M3 (M2+money market instruments). The fact that they have divided M2 by the population seems a little strange, but basically the graphic shows the amount of "money" (cash+current accounts) per person over a time period in the US.
sbelskie|4 years ago
lottin|4 years ago
nabla9|4 years ago
Velocity of M2 Money Stock/Population https://fred.stlouisfed.org/graph/fredgraph.png?g=DPfD
unknown|4 years ago
[deleted]
hogFeast|4 years ago
Saying that velocity is falling when supply isn't interesting or relevant. The question is whether supply is growing in excess of demand (as ever).
crb002|4 years ago
lupire|4 years ago
A hockey stick requires far more than just a 30% lift in an anomalous year.
zeckalpha|4 years ago
crb002|4 years ago
https://fred.stlouisfed.org/graph/?g=DPfB
ubertoop|4 years ago
R0b0t1|4 years ago
Parent to that tweet is arguing we have not seen those effects despite past federal reserve action and so there is no worry.
The wider context to this conversation is that some people [who?] believe federal reserve policy is flawed and supported by systemic bias in the reporting of economic indicators like GDP.
anm89|4 years ago
So saying the M2 is high relative to population means that we have been "printing money" (increasing the USD money supply) at a high rate relative to population.
lottin|4 years ago