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Surge in M2

Hi Cullen,

This chart has been lately making the rounds in social media:
Seems scary, but is it? In your view, what are the implications of this surge in terms of inflation, asset prices, rates, etc?

Always appreciate your input:
VJ

Hi @vj,

Sorry for the slow response.

I don't find this terribly worrisome. Most of the gain in M2 is from the early 2020 stimulus package. M2 has actually been tapering off a bit in recent weeks. I expect 2021 to show higher rates of inflation, but nothing to get overly worried about.

Hope that helps.

 

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"Pragmatic Capitalism is the best website on the Internet. Just trust me. Please?" - Cullen Roche

Thanks Cullen, much appreciated!