Friday, 20 June 2014

The Short Version of the "Austrian" True Money Supply (TMS), as of 9 June 2014

The short version of the Austrian True Money Supply (SVTMS) for the U.S. increased 0.21% (11.54% annualised) during the most recent week ending 9 June 2014 to hit $10.1540 trillion. This measure of the money supply is calculated from the latest data published by the Federal Reserve. 

The 1-year growth rate in the money supply was 7.96% for the week, down from 8.08% last week and still lower than the 8.30% average since 1980. 

The growth rate in the money supply was yet again lower than it was a year ago, recording the 102nd week in a row with a diminishing growth rate. 

The 5-year annualised growth rate in the money supply also continues to decline. At 10.45%, it was the lowest recorded for more than two years and 1.02 percentage point lower than same week last year.

As has become a customary conclusion in this report and as the table below and charts above demonstrate, the overall growth rate in the money supply continues to decline. 

As increased money supply fuels stock market gains (as some of the new money finds its way to the stock market), the combination of a U.S. stock market regularly posting new all-time highs this year and a declining growth rate in the money supply does, at best, suggest poor stock market returns going forward if the decline in the money supply growth rate continues to decline. 

Visit the "Austrian" True Money Supply archive here.