There are currently $6 Trillion more dollars floating around the system than there were pre-pandemic. We're not even talking about the ZeroInterestRatePolicy and Lower for Longer and all that, this is the actual moolah that has been created.
Something is very wrong with what we still refer to as "Capitalism" if that sort of stimulus is required to simply maintain equilibrium.
From Barron's
....M2 calculates the aggregate currency and coins held by banks, travelers’ checks, balances in retail money-market funds, savings deposits, and more. Data for January, released Tuesday afternoon, showed a negative growth rate of 1.7% versus a year ago, the biggest year-over-year decline on record and the first time it has contracted in back-to-back months.
December’s money supply growth rate was a negative 1.12% versus the previous year, the first-ever decline. The monthly growth rate has been falling consistently since mid-2021, following a historic peak of 27% growth in February 2021. The Fed started publishing M2 data in 1959....*****
....That the Fed’s measures are working is just one part of the story. The other question is whether the bank’s tightening has done enough. Although M2 growth rates are declining at a historic pace, levels are still abnormally high: Money supply remains 39% higher than it was before the Covid-19 pandemic. In other words, the amount of liquidity in the system is still significantly elevated, and too much money chasing too few goods and services can spell inflation.
That means one can’t have too much confidence that the monthly M2 percentage decline will be enough to get inflation down, Robert Sockin, global economist at Citi said.
The current M2 of $21.27 trillion is nearly $6 trillion higher than the prepandemic level. At this point, money in the economy has surpassed real gross domestic product levels, a momentous shift that first happened in 2020 when the Fed flooded the economy with cash as the pandemic hit....
....MUCH MORE
Combined with yesterday's post from the Congressional Budget Office there is no way in hell that the 9.1% inflation print we saw last year is going to be the inflation high-water mark for this decade. There is simply no way.
