This is by no means a hard-and-fast indicator, but the annualized 13-week non-seasonally adjusted M2 money supply has turned negative.
This is as small time deposits continue to plummet and other components are flattening. The ramp down in small time deposits is likely due to, in my opinion, Bernanke's and the Fed's mission to destroy savers. The flatlining in the other monetary components could be suggesting a slowdown in the economy- a thesis supported by other indicators like the ISM and the number of companies cutting dividends.
In any event, a slowdown in M2 growth rates has been associated with the Fed easing or enacting new rounds of quantitative easing in the past. A further contraction in money supply suggests that the Fed's talk of tapering is just that, talk.
This is as small time deposits continue to plummet and other components are flattening. The ramp down in small time deposits is likely due to, in my opinion, Bernanke's and the Fed's mission to destroy savers. The flatlining in the other monetary components could be suggesting a slowdown in the economy- a thesis supported by other indicators like the ISM and the number of companies cutting dividends.
In any event, a slowdown in M2 growth rates has been associated with the Fed easing or enacting new rounds of quantitative easing in the past. A further contraction in money supply suggests that the Fed's talk of tapering is just that, talk.
No comments:
Post a Comment