Friday, 23 May 2014

The Short Version of the "Austrian" True Money Supply (TMS), as of 12 May 2014

The short version of the Austrian True Money Supply (SVTMS) for the U.S. decreased by 0.04% (2.15% annualised) during the most recent week ending 12 May 2014 to hit $10.0670 trillion. The money supply is calculated from the latest data published by the Federal Reserve. 

The 1-year growth for the money supply dropped to 7.91% for the week, down from 8.00% last week. Compared to the same week last year, the growth rate declined by 1.56 percentage points. 

The 5-year annualised growth rate continues to fall. At 10.60%, it was the lowest growth rate reported since week ending 25 June 2012. The current growth rate was 94 basis points lower than at this stage last year. This was the 24th consecutive week with a declining growth rate compared to previous year.

The money supply growth rates discussed in this report continue to decline. Excluding the shorter term growth rates which tend to fluctuate considerably (1- to 39 weeks), all the growth rates except for the 7-, 20- and 30-year growth rates are lower today than they were one year ago.

As long as this overall decline in the money supply growth rate continues, it serves as a warning to U.S. stock market buy and hold investors that, at best, future returns could be dismal.

Visit the "Austrian" True Money Supply archive here.