{"id":14926,"date":"2015-12-01T16:24:20","date_gmt":"2015-12-01T21:24:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14926"},"modified":"2015-12-01T16:24:58","modified_gmt":"2015-12-01T21:24:58","slug":"us-stock-market-an-accident-waiting-to-happen","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14926","title":{"rendered":"US Stock Market \u2013 An Accident Waiting to Happen"},"content":{"rendered":"
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US Stock Market \u2013 An Accident Waiting to Happen\u00a0<\/a><\/h3>\n<\/div>\n
Monetary Inflation Becomes Less Supportive of Asset Prices<\/strong><\/div>\n
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We have recently discussed the sorry state of the\u00a0junk bond market<\/a>, as well as the noteworthy decline in the annual growth rate of\u00a0US money supply<\/a>\u00a0aggregates. The latter has finally manifested itself not only in terms of narrow monetary aggregates like M1 (see chart<\/a>) and AMS (\u201cAustrian money supply\u201d, a.k.a. TMS-1, the narrow true money supply), but also in the broader true money supply aggregate TMS-2.<\/p>\n

\"awh\"Photo credit:\u00a0Keith Maniac<\/a><\/p>\n

As a reminder, here is the most recent chart of the year-on-year growth rate of TMS-2 :<\/p>\n

\"1-TMS-2,<\/a>Year-on-year growth in money TMS-2 has declined to its slowest pace since November of 2008, shortly after Ben Bernanke\u2019s money printing orgy had been unleashed \u2013 click to enlarge.<\/p>\n

Below is a chart of the annual growth rate of narrow money AMS from the transcript of the\u00a0October advisory board meeting of the Incrementum Fund<\/a>. US money AMS is calculated by Dr. Frank Shostak. The chart shown below originally appeared in his AAS Economics Weekly Report of October 5, 2015.<\/p>\n

As you can see, the growth rate of the narrow true money supply has fallen off the proverbial cliff recently. It is fair to assume that it will continue to be a leading indicator for the growth rate of TMS-2. Steven Saville of the\u00a0Speculative Investor<\/a>\u00a0has recently mentioned that the sharp growth in euro area money supply (a chart of the growth differential between US and euro area AMS\u00a0can be seen here<\/a>) could well help to keep asset prices up longer, by offsetting the slowdown in US money supply growth to some extent.<\/p>\n

This idea certainly has merit, as there exists empirical evidence to this effect. However, the US stock market will likely continue to be the leading international stock market. Should leveraged positions in the US market run into trouble, it will affect \u201crisk asset\u201d prices nearly everywhere. The danger that this could soon happen is clearly growing:<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

US Stock Market \u2013 An Accident Waiting to Happen\u00a0 Monetary Inflation Becomes Less Supportive of Asset Prices We have recently discussed the sorry state of the\u00a0junk bond market, as well as the noteworthy decline in the annual growth rate of\u00a0US money supply\u00a0aggregates. The latter has finally manifested itself not only in terms of narrow monetary […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,1304,954,10752,6170,2442],"class_list":["post-14926","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-monetary-inflation","tag-money-supply","tag-money-supply-growth","tag-pater-tenebrarum","tag-us-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14926"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14926\/revisions"}],"predecessor-version":[{"id":14928,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14926\/revisions\/14928"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}