Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

US Money Supply Growth Set Another Record in February

  by    0   1

US money supply growth hit another all-time high in February as the Federal Reserve continues to churn out dollars and inject them into the economy.

As measured by the True Money Supply Measure (TMS), the money supply grew by 39.1% year-on-year. That was up slightly from January’s record growth of 38.7%.

To put the growth in money supply into some historic perspective, the rate in February 2020 was a mere 7.3%, which was a healthy increase from the under 2% growth we were seeing in 2019.

February marked the eleventh month of remarkably high money supply growth in the wake of unprecedented quantitative easing, central bank asset purchases, and various stimulus packages.

Money supply growth also broke a record as measured by M2. By the more traditional measure, the money supply grew 27.0%. That compares to January’s growth rate of 25.9%. M2 grew 6.8% during February of last year.

The “true” or Rothbard-Salerno money supply measure (TMS)—is the metric developed by economists Murray Rothbard and Joseph Salerno, and is designed to provide a better measure of money supply fluctuations than M2. This measure of the money supply differs from M2 in that it includes Treasury deposits at the Fed (and excludes short-time deposits, traveler’s checks, and retail money funds).

Historically, the growth in the money supply has never been higher with the 1970s being the only period that comes close.

M2 growth rate fell off considerably from late 2016 to late 2018 during the Federal Reserve’s failed attempted to reverse the extraordinary monetary policy it launched during the Great Recession. M2 began growing again in 2019 when the Fed relaunched quantitative easing (although it refused to call it that.) Since March, M2 has followed a trend similar to that of TMS, but to a lesser degree.

Ryan McMaken at the Mises Institute says the growth in the money supply won’t likely slow anytime soon.

It appears that now the United States is nearly a year into an extended economic crisis, with around 1 million new jobless claims each week from March until mid-September. Claims have remained above 600,000 every week since. Moreover, more than 3.8 million unemployed workers are currently collecting standard unemployment benefits, and total unemployment claims have failed to fall back to non-recessionary levels, even a year after lockdowns began. More than seven million additional unemployed are collecting “Pandemic Emergency Unemployment Compensation” as of February 27.

“The central bank continues to engage in a wide variety of unprecedented efforts to ‘stimulate’ the economy and provide income to unemployed workers and to provide liquidity to financial institutions. Moreover, as government revenues have fallen, Congress has turned to unprecedented amounts of borrowing. But in order to keep interest rates low, the Fed has been buying up trillions of dollars in assets—including government debt. This has fueled new money creation.”

This is precisely why Peter Schiff says we’re adrift in a sea of inflation.

The powers that be tell us we don’t have to worry about inflation and that any rise in prices will be “transitory.” But it’s important to remember that money printing is inflation properly defined. Rising prices are just a symptom of inflation. With or without a rising CPI, we currently have inflation at unprecedented levels.

Peter Schiff warned months ago that all of the people who think this can go on forever are in for a rude awakening. Things that can’t go on forever don’t.

Just because we’ve gotten away with it for this long doesn’t mean we’re going to get away with it forever. … I think we’re very, very close to a major collapse of the dollar, a major breakout in the price of gold, to a breakdown in the bond market. And it isn’t going to happen overnight. It’s going to sneak up on people when they least expect it. … It’s not a crisis until it becomes a crisis. And then it becomes a crisis very, very quickly.”

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

More Air Hisses Out of the Housing Bubble

As interest rates rise, the air continues to hiss out of the housing bubble. Existing home sales tumbled to a two-year low in May. Sales fell to a seasonally adjusted 5.41 million units, according to the latest data from the National Association of Realtors. It was a 3.4% drop, bringing existing home sales to the […]

READ MORE →

Where Does the Gold Go?

A few years ago, CNBC commentator Jim Leventhal made a pretty astounding comment. When asked about gold, he said he had no interest in it because gold has no uses as a metal. This is a pretty absurd statement. Gold has multiple uses. And it would probably have even more if it wasn’t so rare […]

READ MORE →

Retail Sales Unexpectedly Dropped in May

Retail sales unexpectedly dropped in May, casting doubt on Federal Reserve Chairman Jerome Powell’s “the American consumer is healthy” narrative.

READ MORE →

Producer Prices Continue to Rise at Near-Record Pace

Producer prices continue to rise at a near-record pace, further undercutting the notion that we’ve reached “peak inflation.”

READ MORE →

Consumer Sentiment at Record Lows as Inflation Empties Wallets

Consumer sentiment plunged to record lows in June. The plummeting consumer sentiment numbers surprised mainstream analysts but they shouldn’t have given Americans are taking a pay cut month after month thanks to red-hot inflation.

READ MORE →

Comments are closed.

Call Now