Monday, 2 December 2013

The Short Version of the "Austrian" True Money Supply (TMS), as of 18 November 2013

The money supply data was issued today instead of Friday by the Fed due to Thanksgiving on Thursday. 

The short version of the Austrian True Money Supply (SVTMS) for the U.S. increased by 0.25% (14.08% annualised) during the most recent week ending 18 November to reach USD 9.7609 trillion calculated based on monetary statistics just released by FRED

Of the USD 9.7609 trillion in money supply for the week, 11.8% was Currency, 14.4% was Checkable Deposits while the bulk, 73.8%, was made up of Savings Deposits. Exactly ten years ago the same break down was 14.7%, 13.6% and 71.7%. 

The 1-year growth rate in the money supply picked up pace for the second week running, increasing from 7.80% last week to 8.08% this week. The trend in the growth rate is however continuing heading downwards, with the current 1-year growth 1.43 and 2.75 percentage points lower than it was 26 weeks and 1 year ago, respectively. 

Since bottoming at 4.19% on 23 September this year, the 39-week growth rate (annualised) has since climbed to 8.61%. Although the growth rate has increased during the last two months, it is currently 2.39 percentage points lower than it was a year ago.

In general, most of the current growth rates in the table below are lower than the were one year ago, pointing to a general decline in the rate of growth in the money supply. The US stock market on the other hand is heading in the other direction. To the extent that money supply growth drives stock prices, such a "disconnect" is unsustainable longer term.