/biz/ - Business & Finance

>>25452878
>M1 went up by 60%, therefore 60% of all currency was created in 2020

Not how it works, if I go to an ATM right now and take out $500 then M1 goes up by $500 despite no additional currency having been printed. M2 and M3 are slightly better depictions of actual money supply for this reason, but the increases are mostly from purchase of securities with existing currency by the government and not printing of additional currency. Pic related and a good video explaining this all:

>https://www.youtube.com/watch?t=821&v=te8LIMfrkyk

>>25432441
So the aggregate prices of goods have risen more than ~2% annually in the US over the last decade or are you just pulling this out of your ass because you saw the money supply graph and don't understand how quantitative easing differs from printing more currency?


>>25432471
My guess is a liquidity crisis, exacerbated by the sluggish transaction speed, is going to make it much worse than it otherwise would be. /biz/ will be pink for months to come

>>25362179
While there was a massive injection of cash into the economy, this is not an accurate depiction. Without getting too much into the weeds, M1 measures currency and coin, M2 includes all of that PLUS checkings & savings / money market accounts and a couple other assets defined as "near money". If I take $500 out of my savings account at an ATM, M1 increases by $500.

M2 is a slightly better definition of the money supply. The point you're getting at about inflation holds true, and I think every investor should be prudent and cautious about holding assets / cash in USD and Euros, but it's not the case that the Fed just printed 37% of our money supply this year and have simply done an expert job at controlling prices. I also do not believe the CPI is accurately capturing inflationary effects and I would encourage everyone to do their research as to what goods/services are included in the basket.

>>25347563
In fairness to the schizos they're not wrong about this being a massive injection of money even when looking at M2/M3. They're just not making a smart inflation hedge play.