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Chart of the Week: M2 Money Supply

Posted By Barry Ritholtz On June 14, 2004 @ 1:32 pm In Finance | Comments Disabled

M2 Money Supply [1] has just hit its highest level (M/M annualized increase, seasonally adjusted) since the post September 11th, 2001 period.

The Federal Reserve is increasing liquidity as a cushion to offset upcoming rate hikes. Inflation fears led M2 growth to slow Q4 2003 and early 2004. Liquidity increased in February, March and April ~10% (month over month annualized) before spiking in May to the highest levels since the post 9/11 period.

May M2 Spike (m/m annualized)
m2_post_9.11
Source: Dallas Federal Reserve [2]

In addition to the usual gyrations, Money Supply seems to spike every 4 years — just before the Presidential elections; Call it a perk of incumbency . . .

Random Items:
Housing values starting to show signs of cooling [3]
Why interest rates will climb [4]
A hidden menace [5]
What Should President Bush Learn from President Reagan? [6]
Paid ‘ads’ for song plays revive payola memories [7]
Meet Joe Blog [8]

Quote of the Day:
“Investors operate with limited funds and limited intelligence, they don’t need to know everything. As long as they understand something better than others, they have an edge”
-George Soros [9]


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/06/chart-of-the-week-m2-money-supply/

URLs in this post:

[1] M2 Money Supply: http://invest-faq.com/articles/regul-fed-m123.html

[2] Dallas Federal Reserve: http://www.dallasfed.org/data/data/m2m.htm

[3] Housing values starting to show signs of cooling: http://www.latimes.com/business/la-re-harney13jun13,1,7398658.story?coll=la-headlines-business

[4] Why interest rates will climb: http://cbs.marketwatch.com/news/story.asp?column=The+Week+on+the+Street&siteid=mktw

[5] A hidden menace: http://www.economist.com/printedition/displayStory.cfm?Story_ID=2737004

[6] What Should President Bush Learn from President Reagan?: http://www.aei.org/news/newsID.20683/news_detail.asp

[7] Paid ‘ads’ for song plays revive payola memories: http://www.chron.com/cs/CDA/ssistory.mpl/front/2621567

[8] Meet Joe Blog: http://www.time.com/time/magazine/article/0,9171,1101040621-650732-1,00.html

[9] George Soros: http://www.amazon.com/exec/obidos/ASIN/0066620473/ref=ase_thebigpictu09-20/102-4529470-0078540

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