Research Library
Charts Money Supply July 2007 through December 2007
In my reading, I frequently come across literature that interests me (see third party research links
for some of my reading list). Typically, I post these files to the Research Library by their
category, and as that fills up, I post them in their category archives so I (or readers) can reference in
the future (see below):
In my reading, I frequently come across literature that interests me (see third party research links
for some of my reading list). Typically, I post these files to the Research Library by their
category, and as that fills up, I post them in their category archives so I (or readers) can reference in
the future (see below):
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Interesting Charts on Money Supply
First Chart is as of 12/21/07. The chart (and the one below) was obtained from John Mauldin's
12/22/07 Weekly Update (courtesy of Bill King). Data can be obtained from the St. Louis Fed website.
Interesting divergence.
Now look at the chart below. It shows the growth of the various money supply categories. Notice that
M3, which the Fed no longer publishes, was rising rapidly through last year. Also notice that M3 is a
growing part of the overall money supply. Basically, to get M3, you add Eurodollars, repurchase
agreements, CDs to M2. M2 is cash in the banks, savings accounts, money market accounts, etc.
What this tells us is that Eurodollars and repos are driving the growth in the money supply.
Can we come to any firm conclusion? Not yet, because the data is still working its way through the
system. But the massive actions the central banks are taking plus the growth of the money supply
while actual cash is shrinking is a worrisome development. This will be worth watching!
First Chart is as of 12/21/07. The chart (and the one below) was obtained from John Mauldin's
12/22/07 Weekly Update (courtesy of Bill King). Data can be obtained from the St. Louis Fed website.
Interesting divergence.
Now look at the chart below. It shows the growth of the various money supply categories. Notice that
M3, which the Fed no longer publishes, was rising rapidly through last year. Also notice that M3 is a
growing part of the overall money supply. Basically, to get M3, you add Eurodollars, repurchase
agreements, CDs to M2. M2 is cash in the banks, savings accounts, money market accounts, etc.
What this tells us is that Eurodollars and repos are driving the growth in the money supply.
Can we come to any firm conclusion? Not yet, because the data is still working its way through the
system. But the massive actions the central banks are taking plus the growth of the money supply
while actual cash is shrinking is a worrisome development. This will be worth watching!
