Friday, 31 January 2014

The Short Version of the "Austrian" True Money Supply (TMS), as of 20 January 2014

The short version of the Austrian True Money Supply (SVTMS) for the U.S. decreased by 0.25% (12.01% annualised) during the most recent week ending 20 January to reach US$ 9.8614 trillion calculated from the most recent monetary statistics published by the Federal Reserve

Click here to access weekly reports since August 2013 and here to view the recap of 2013. 

The 1-year growth rate in the money supply increased to 7.85% from 7.20% last week and from 6.48% three weeks ago.

The 1-year growth rate remains substantially lower than it was a year ago however, down 3.03 percentage points. This was the 82nd week in a row with a declining growth rate compared to the same period last year.

Most of the money supply growth rates in the table below continue to be lower than a year ago, still pointing to a slow down in the overall growth rate. This is not good news for the stock market, especially as the Fed now has decided to taper its asset purchases by another US$ 10 billion a month starting in February. It has now cut the QE program from US$ 85 billion a month to US$ 65 billion, or 24%, during the course of just two months. With Bank Credit growth closing in on zero, the prospects for further declines in the money supply growth rate look increasingly likely. If that proves to be correct, the stock market will deflate and the economy with it. And that would be a good thing, if it hadn't been for the Fed which will then likely re-inflate both once again.