When did M2 decline? 
Posted on 09/11/2021 9:27:28 AM PDT by Browns Ultra Fan
Applying normal economic benchmarks to this situation doesn’t instruct us about anything.
We are in uncharted economic territory.
Wouldn’t this analysis imply wide scale deflation? That doesn’t mesh with the inflation we are seeing.
What am I missing? Banks trying to stymie deposits???
They are putting the money into market securities.
the misery index is BACK!!!
Let’s see, For years they implored us to save money and now that we are, they are worried about the velocity of money flow through the economy? I’m glad I didn’t pursue an MBA, as they appear to prove themselves idiots.
Simply the problem is, Democrats can’t earn or handle the money they have and Americans can. Democrats outnumber Americans, so there is an economic and political divide.
Democrat government is a hammer and everything looks like a nail to it.
Pray for deflation before they start pounding on the Americans.
No wonder they are creating new fees for us to pay!
The Fed keeps adding billions to the money supply every month. Where does it ultimately land? Bank deposits.
Am I reading it right that this implies?
It means companies are fully capitalized?
They’re not taking out more loans? Which means no moving in the market?
There is too much cash on the balance sheet and no production of assets to buy more, or markets to develop investment into?
That is exactly what we are seeing, the beginning of deflation. We are not in uncharted territory, every time we see M2 drop, and deposits exceed loans, we get deflation. You are spot on.
Broken Transmission: Bank Deposits Have Exceeded Bank Credit Since Covid (The Phed Pneumonia And The Fauci Flu)!
This is bad news?
Not for us, our adult children/grand kids/siblings and friends our age. We are not spending and borrowing.
We will deposit about $200 in just received auto insurance rebate checks due to driving less. When you drive less, you buy less gasoline and have less maintenance costs on your vehicles.
I have filled up my pickup with gas twice since the pandemic, and I still have a quarter of a tank. I have to remember to drive it once a week to avoid blowing another battery from not using it and recharging it.
My wife’s 15 year old Lexus gets gas about every 3 months and a car wash with the gas versus about every 4 weeks, pre pandemic.
We ate out once on our anniversary versus about weekly pre pandemic.
My clothing purchases for the past 18 months: Two pair of sweatpants, 6 pair of socks and a six pack of underwear. These came from Costco orders with no driving, shopping, delivery costs. The good news is I’m still wearing the same size of clothing as pre pandemic.
My wife has bought 2 pair of sweats and 3 pair of linen slacks from Costco. She still wears the same size as pre pandemic.
We just had a fairly large update/remodel/re exterior paint jobs on our home and handled it from our checking and didn’t have hit savings.
We just are not spending money as before the pandemic. Compared to some of our neighbors, siblings, friends and relatives, we are big spenders.
Any travel by our neighbors, friends and siblings is to go visit relatives. They are finding some good fares and can fit their schedules with the lower rates.
I disagree that democrats out-number Americans. That is a false impression generated by the commie control of most of the ‘media/entertainment’ industry.
all useful investments are fully funded.
beyond that amount
there is nothing for money to do
beyond depositing funds at the bank
and get zero percent interest
This is when they start talking about negative interest rates
“Pray for deflation before they start pounding on the Americans.”
I think you mean disinflation rather than deflation.
Inflation: OK at 2-6%, I survived it fine even at 14%. Hardest on the non-investor class. Upper half of population can use it to advantage or ameliorate its damage through proper investing.
Stagflation: Inflation with economic stagnation, usually doesn’t last too long fortunately. Affects the same segments of the economic strata in similar fashion to inflation, except wages don’t usually keep up as well as under typical inflation, so wage earners suffer more than investor class.
Disinflation: (inflation that is declining), can be good or bad depending on other factors, usually good for most people, especially when coming out of higher inflation.
Deflation: The worst situation, very do well under it the longer it lasts and it can be more dangerous than inflation. Can be difficult to get out of (see Japan), stifles economic activity, investing and innovation.
Hyperinflation: The “I’ll get even” dream of the lower class even though it’s the worst thing that can happen to everyone. Fortunately, it’s the most rare of all the alternatives. The USA has never experienced it. If we do, there is nowhere to hide for more than weeks, including all the hot ideas of the preppers. Only exception being the tiny percentage of isolated hermit-style preppers who live outside the economy all the time anyway.
Re the above comment, should read:
Deflation: “The worst situation, very FEW do well under it”
There is balance in the universe. All the money you save is countered by the money my wife squanders.
We’re seeing inflation in some sectors and deflation in others. I will also say that a year and a half of zero commuting costs has seen my savings soar.
When did M2 decline?
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