Real M2 Money Stock (M2REAL)

[Husires]

FRED add a new chart to measure the money supply in 1982-84 Dollars - Real M2 Money Stock (M2REAL)

Source https://fred.stlouisfed.org/series/M2REAL

They take the CPI and then combine it with the M2 money supply. Is that enough to prove that they didn't print a lot of money? Do you think that they will try to put out more data or modify the method of calculation to prove that, or are they really not printing a lot of money?

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[tadamichi]

They take the CPI and then combine it with the M2 money supply. Is that enough to prove that they didn't print a lot of money?

First of all cpis are never that reliable, because they use a basket of selected goods, and there’s an interest to make them seem lower than they really are.

We can still use these numbers tho:
(Units are in Billions)

In January 2020 the „real“ m2 was 5954, in May 2022 it already reached 7463. Which gives us an increase of approximately 25% in just a little more than 2 years. This is 1/4th of all the real m2 usd ever in existence. If your income and/or life savings didn’t increase by atleast 25% in the same period you will be at an disadvantage, until you can catch up to these numbers, and many won’t ever be able to. And don’t forget older people potentially saved up money since generations, this is a loss of time forever. A big part of their working life was being spent working for free now.

If we go to may 2008 3583, till now. The increase is 108% already.

If we compare it to the regular m2 now. In January 2020 15401, till May 2022 21754. An increase of 41% in just a little over 2 years. And from may 2008 7711, till now. An increase of 182%.

The consequences of these choices are still into effect and didn’t fully play out yet, even if money printing would slow down. If your income and/ or life savings didn’t grow in a similar way during this time period, you will be affected by this. Money supply isn’t direct inflation, but it has long term consequences that will play out in a more delayed way(because in fiat money concentrates more and more heavily at the top, so it takes some time until regular people see heavy inflation because more money flows down, but we already saw how much richer fiat whales got during heavy money printing and this one of the causations, it’s engraved into the system, the fate is set, no work is required for this).

It proves the opposite, they printed a lot. This line should be flat, if they didn’t print much. It’s important here to choose a big time horizon, when looking at the statistic.

[edgycorner]

At this point, the Feds are only fooling themselves and the administration.
M2 isn't even a real indicator of the actual money supply. Use it in whatever model, however you like, you will end up with false results 100% of the time. But ofc, Feds can keep on correlating all night long. It still won't change the reality, which is : M2 doesn't deal with offshore money but only domestic money. M2 became useless the moment economy went global.
This is misleading and I hope Feds can stop jerking off the administration.

[Hydrogen]

Image link:  https://i.imgur.com/2VU9JtJ.jpg

Interesting to see a discontinued label on the M1 money supply.   

There are many sources who track real inflation before it was redefined 1970s to 1980s.

With M1 being discontinued it appears there is yet another redefinition of the statistic in 2021.

People tend not to care about topics like this until it directly affects them. By then its usually too late.

[edgycorner]

Interesting to see a discontinued label on the M1 money supply.  

There are many sources who track real inflation before it was redefined 1970s to 1980s.

With M1 being discontinued it appears there is yet another redefinition of the statistic in 2021.

People tend not to care about topics like this until it directly affects them. By then its usually too late.

Feds stopped using it a long time ago, not 2020. It became redundant in the early 70s.

The market is already affecting everyone. But M2 is an obsolete indicator. This is why people don't care what the fed says about it  

[davis196]

Feds stopped using it a long time ago, not 2020. It became redundant in the early 70s.

The market is already affecting everyone. But M2 is an obsolete indicator. This is why people don't care what the fed says about it  

I agree. Indicators like M1 and M2 make sense if we are talking about a truly national currency. The US dollar is more like a global currency, rather than a national currency.
I don't know what OP is trying to prove to us by showing this chart? Is he trying to prove that the Federal Reserve isn't increasing the money supply enough? The FED guys can come up with different ways to manipulate statistical data and calculation methods, but who cares.
The US federal budget deficit isn't going to disappear by applying some statistical magic tricks. The 4.5 trillion dollar budget deficit will stay forever and the Federal Reserve will keep printing more money and buying US government bonds until the entire financial system collapses under it's own weight.

[Husires]

I don't know what OP is trying to prove to us by showing this chart? Is he trying to prove that the Federal Reserve isn't increasing the money supply enough? The FED guys can come up with different ways to manipulate statistical data and calculation methods, but who cares.

What I'm trying to reach is whether the Fed's decisions will affect the nature of the charts or the way the data is presented to the public, or will they use the old charts that show the situation much worse.
As for the effect, the problems of the economy will not be solved by edit chart or how to calculate it, but it affects the psychology of consumers, but this is not what I am looking for.

[edgycorner]

I don't know what OP is trying to prove to us by showing this chart? Is he trying to prove that the Federal Reserve isn't increasing the money supply enough? The FED guys can come up with different ways to manipulate statistical data and calculation methods, but who cares.

What I'm trying to reach is whether the Fed's decisions will affect the nature of the charts or the way the data is presented to the public, or will they use the old charts that show the situation much worse.
As for the effect, the problems of the economy will not be solved by edit chart or how to calculate it, but it affects the psychology of consumers, but this is not what I am looking for.

Given how so much of the money can't be accounted for. Stats and analysis based on these stats aren't the way to make policies.
It will only lead to bad decisions.

Feds should stick to something empirical. I can't propose an alternate solution here. I don't know enough about economics. But I am sure a country with trillion-dollar GDP got some good economists.

M2 and CPI are just a distraction to console the general public.