Monday, 4 March 2013

Base Money Continues to Expand Rapidly, Movements in the U.S Monetary Base and Money Supply (as of 20 Feb-13)


Base money (monetary base) increased rapidly for the fourth bi-weekly period in a row according to data released by FRED on Friday for the period ending 20 February 2013. The increase brought base money 1.78% higher than the USD 2.8286 trillion reported two weeks ago to USD 2.8789 trillion this week. Compared to the same week last year, base money increased by 4.58%. All the money supply measures increased  significantly on last year with M1 increasing 11.41% and M2 by 6.94% compared to the same period last year. M1 and M2 money supply is still growing significantly on a year-on-year (YoY) percentage change basis, but the growth has slowed down compared to the expansion during large parts of 2011 and 2012, 

Monetary Base
The Monetary Base increased 1.78% for the bi-weekly period. At USD 2.8789 trillion it was the highest base ever reported. The base was up by 4.58% compared to the same period last year.

M1 Money Stock/Supply
The M1 Money Stock was down 0.65% for the bi-weekly period and ended the week on USD 2.4701 trillion. Compared to the same period last year, M1 increased 11.41%.

M2 Money Stock/Supply
M2 Money Stock increased 0.07% for the bi-weekly period and ended the week on USD 10.4245 trillion. Compared to the same period last year, M2 was up by 6.94%.

M1 Multiplier and M2/Base ratio
The M1 multiplier remains considerable lower than it was during 2007 and the majority of 2008. It has however increased steadily from around June 2011 and ended the week 6.58% higher than this time last year. The M2/Base ratio also remains considerably lower than the historical average, but it has also increased steadily since June 2011 and is now 1.25% higher than this time last year.








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