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

Consumer Debt Increase Slows in December But Americans Still Relying on Credit Cards

Consumer debt grew at a slower pace in December, but Americans continued to rely heavily on credit cards to keep up with high price inflation.

READ MORE →

Shrinking Money Supply Undercuts “Soft Landing” Narrative

The better-than-expected non-farm payroll report for January along with the smaller interest rate hike delivered by the Federal Reserve at its February meeting increased optimism that the central bank can bring price inflation back to 2% without tanking the economy. But the shrinking money supply undercuts this soft landing narrative.

READ MORE →

Central Bank Gold Reserves Chart Biggest Increase Since 1950 in 2022

Central banks closed out 2022 with reported net purchases of 28 tons of gold in December. Including large unreported purchases, this brought total central bank gold buying in 2022 to 1,136 tons. It was the highest level of net purchases on record dating back to 1950, and the 13th straight year of net central bank […]

READ MORE →

Gold Mine Production Up Modestly in 2022 But Remains Below Pre-Pandemic Peak

Gold mine production was up modestly in 2022 as mining operations normalized post-pandemic. But mine output still hasn’t returned to the peak we saw in 2018, boosting speculation that we have possibly reached “peak gold.”

READ MORE →

Why Have So Many People Dropped Out of the Labor Market?

Why is there a labor shortage in the US? In a nutshell, a lot of people have simply dropped out of the labor market. They’re not working. But why?

READ MORE →

Comments are closed.

Call Now