First Quarter M2 Money Supply Declines
In John Mauldin’s latest weekly letter he posts the First Quarter Investment Review and Outlook of Lacy Hunt and Van Hoisington. One of the surprising numbers was the fact that M2 Fed money supply declined from $ 10.505 trillion to $ 10.450 trillion for the quarter, this occurring in spite of the large asset purchases by the Fed. So in spite of the Fed’s actions, velocity declined and the result is that the Fed did not print any money.
This is not a basis for the kind of stock market action we are seeing, Commodities, gold, and T-Bonds seem to be telling the real story.