This article is from Michael Pollaro’s The Contrarian Take, the best blog on money supply. Michael measures True (“Austrian”) Money Supply (TMS) each month as the data comes out and provides meaningful measures and interpretations of the data. I urge you to visit his site for his data and his excellent explanation of TMS. — JH
The next Great Recession is in the making. The money supply trends say so. And it is looking more and more like this next Greater Recession is going to be one for the ages …
The money supply, as measured by The Contrarian Take‘s broad (and preferred) TMS2 metric (TMS for True “Austrian” Money Supply), posted a 14.6% year-over-year increase in February, making this the 39th consecutive month of double digit year-over-year rates of monetary inflation. All told, TMS2 is up a huge 50% over those 39 months. Even more interesting is what those TMS2 metrics were leading up to the housing boom turn credit bust turn Great Recession – 37 consecutive months for a cumulative increase of 50%.
Here’s a look at the monetary record through a TMS lens beginning year 2000…
So what’s this got to do with the next Great Recession? Isn’t this monetary grease what the economy needs to heal and grow?
Well, in stark contrast to what mainstream economists and market analysts proclaim … all that this monetary largesse will do is guarantee the next Great Recession. …
Please click here to read the article at The Contrarian Take.
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Yet all the velocity charts are making new lows. M1 Money Multiplier, Velocity of M2 Money Stock and Velocity of MZM Money Stock are all swirling the bowl at this point. It’s the same as granny putting her money under a mattress. Once under the mattress, there is no velocity.
I would also argue that we never exited the first debt implosion and that everything that has followed since 2007 is merely an extention of that implosion. I agree with your point concerning what is to follow, as they can’t outrun exponential math anymore than other Empires through millinnia. This is bread and circus for the sheeple and nothing more.
What is the correlation between high money supply and recessions?