{"id":22251,"date":"2016-12-10T16:54:22","date_gmt":"2016-12-10T21:54:22","guid":{"rendered":"http:\/\/olduvai.ca\/?p=22251"},"modified":"2016-12-10T16:54:45","modified_gmt":"2016-12-10T21:54:45","slug":"22251","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=22251","title":{"rendered":"US True Money Supply Growth Jumps, Part 1: A Shift in Liabilities"},"content":{"rendered":"<div class=\"art-postmetadataheader\">\n<h3 class=\"art-postheader\"><a title=\"Permanent Link to US True Money Supply Growth Jumps, Part 1: A Shift in Liabilities\" href=\"http:\/\/www.acting-man.com\/?p=48077\" rel=\"bookmark\">US True Money Supply Growth Jumps, Part 1: A Shift in Liabilities\u00a0<\/a><\/h3>\n<\/div>\n<div class=\"art-postheadericons art-metadata-icons\"><strong>A Very Odd Growth Spurt in the True Money Supply\u00a0<\/strong><\/div>\n<div class=\"art-postcontent\">\n<p>The growth rates of various \u201cAustrian\u201d measures of the US money supply (such as TMS-2 and money AMS) have accelerated significantly in recent months.\u00a0 That is quite surprising, as the Fed hasn\u2019t been engaged in QE for quite some time and year-on-year growth in commercial bank credit has actually slowed down rather than accelerating of late. The only exception to this is mortgage lending growth \u2013 at least until recently. Growth in mortgage loans is still very slow though, especially compared to historical growth rates. It cannot really account for the recent surge in money supply growth either.<\/p>\n<p><a href=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/12\/1-TMS-2-and-total-loans-and-leases-y-y-change.png\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48078\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/12\/1-TMS-2-and-total-loans-and-leases-y-y-change-1024x552.png\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" srcset=\"http:\/\/www.acting-man.com\/blog\/media\/2016\/12\/1-TMS-2-and-total-loans-and-leases-y-y-change-1024x552.png 1024x, http:\/\/www.acting-man.com\/blog\/media\/2016\/12\/1-TMS-2-and-total-loans-and-leases-y-y-change-300x162.png 300x, http:\/\/www.acting-man.com\/blog\/media\/2016\/12\/1-TMS-2-and-total-loans-and-leases-y-y-change-768x414.png 768x\" alt=\"1-tms-2-and-total-loans-and-leases-y-y-change\" width=\"640\" height=\"345\" \/><\/a>Year-on-year growth rates of TMS-2 (11.19%, black line) and total loans and leases at commercial banks (7.7%, red line) as of October. In absolute terms money TMS-2 has soared by a staggering $840 billion since the beginning of the year \u2013 click to enlarge.<\/p>\n<p>Usually lending by commercial banks will tend to lead growth in the broad true money supply, but this lead-lag relationship has become a lot less straightforward after the 2008 financial crisis (in fact, it actually reversed for a while). As a result of the Fed\u2019s heavy debt monetization activities, the pace of money supply growth is nowadays influenced\u00a0<em>directly<\/em>\u00a0by\u00a0<em>two\u00a0<\/em>major sources.<\/p>\n<p>Prior to the crisis, the Fed would mainly affect commercial bank lending growth by setting overnight interbank lending rates (i.e., the federal funds rate) and maintaining its rate target by supplying or occasionally draining reserves. QE by contrast creates new deposit money\u00a0<em>directly\u00a0<\/em>(as well as bank reserves to the same extent)<em>,\u00a0<\/em>which adds to the fiduciary media commercial banks conjure into being by means of fractionally reserved lending. QE has fundamentally altered the way the system functions \u2013 this remains the case even now, with the Fed\u2019s QE type activities reduced to reinvesting the proceeds from maturing bonds.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>US True Money Supply Growth Jumps, Part 1: A Shift in Liabilities\u00a0 A Very Odd Growth Spurt in the True Money Supply\u00a0 The growth rates of various \u201cAustrian\u201d measures of the US money supply (such as TMS-2 and money AMS) have accelerated significantly in recent months.\u00a0 That is quite surprising, as the Fed hasn\u2019t been [&hellip;]<\/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":[5728,14579,954,6170,10751],"class_list":["post-22251","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-liability","tag-money-supply","tag-pater-tenebrarum","tag-us-money-supply"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22251","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=22251"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22251\/revisions"}],"predecessor-version":[{"id":22253,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/22251\/revisions\/22253"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}