aggregates

Money Supply

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This page is created to monitor the Money Supply.
Base money is basically correlated to the Federal Reserve’s Balance Sheet (red chart). When base money is increased, the other monetary aggregates (M1 in green, M2 in yellow, MZM in blue) will follow suit.
The expansion of the money supply is the very definition of inflation. As long as these charts go up, we will have inflation.

Money Aggregates Climbing Again

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As I forecasted here, we now see the money aggregates go up again after a slow start in 2013 (Chart 1), which also means that money velocity will go down. So you can expect that U.S. treasury yields will go down as GDP is likely to go down too with the declining PMI.

As U.S. treasury yields go down, we have a perfect environment for gold to reverse its downtrend considering the negative real interest rates.