As I have stated and shown in previous posts, despite the Fed's very public discussion, the growth rates in base money and the money stock has been slowing. This led me to to conclusion that a taper, of sorts, was already in play.
That was a few weeks ago, and I thought you may interested in an update. Looking at current figures, the 'taper' pressure has alleviated to a certain degree. Lets turn to the charts.
13-week annualized M2 money stock
13-week annualized base money
The growth rates in both M2 money stock and base money have perked up a bit versus when I warned about the slowdown a number of weeks ago. That said, neither money figure has given a significant 'all clear' signal. First off, M2 money stock is increasing at a rate above 6%, but the acceleration looks to be slowing. More so, the trend in base money growth still looks to be a slow protracted decline.
The growth in money stock, if it remains in a low or decelerating trend could indicate that economic growth and inflation rates are also at risk. Additionally, slowing trend growth may also suggest that an actual pullback in the Fed's $85 billion monthly bond buying program may just be a pipe dream.
That was a few weeks ago, and I thought you may interested in an update. Looking at current figures, the 'taper' pressure has alleviated to a certain degree. Lets turn to the charts.
13-week annualized M2 money stock
The growth rates in both M2 money stock and base money have perked up a bit versus when I warned about the slowdown a number of weeks ago. That said, neither money figure has given a significant 'all clear' signal. First off, M2 money stock is increasing at a rate above 6%, but the acceleration looks to be slowing. More so, the trend in base money growth still looks to be a slow protracted decline.
The growth in money stock, if it remains in a low or decelerating trend could indicate that economic growth and inflation rates are also at risk. Additionally, slowing trend growth may also suggest that an actual pullback in the Fed's $85 billion monthly bond buying program may just be a pipe dream.
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