Money Supply is a very important indicator. It helps show how tight or loose current monetary conditions are regardless of what the Fed is doing with interest rates. Even if the Fed is tight, if Money Supply is increasing, it has an inflationary effect.
The analysis below covers the Employment picture released on the first Friday of every month. While most of the attention goes to the headline number, it can be helpful to look at the details, revisions, and other reports to get a better gauge of what is really going on.
The following analysis breaks down the Fed balance sheet in detail. It shows different parts of the balance sheet and how those amounts have changed. It also shows historical interest rate trends. The analysis concludes that the resulting lack of Treasury demand is likely another reason Yellen is betting $2T on lower interest rates… she has to focus on the short-term of the curve to make sure the market can absorb the debt!
At SchiffGold, while there are areas of disagreement with Warren Buffett’s right-hand man, the late Charlie Munger, his nuggets of wisdom, often referred to as ‘Mungerisms,’ hold considerable weight in the financial world. Covering topics from wealth and happiness to avoiding foolish mistakes, Munger’s insights are diverse.
