The hottest Money Supply Substack posts right now

Increasing the money supply creates an “exchange of nothing for something” that shifts resources away from producers, which raises prices while weakening real economic growth — this combination is stagflation.
Unexpected boosts in money growth can temporarily cut unemployment and raise output, but once people expect higher inflation they change their behavior and the growth gains vanish, leaving only higher inflation.
The severity and visibility of stagflation depends on private savings: falling savings make weaker growth and higher unemployment clear, while rising savings can mask weak growth even as prices climb.

The money supply has accelerated in recent months, with TMS at a multi-year high and M2 hitting record levels above $22 trillion.
That surge is happening despite weak economic signs like rising layoffs, bankruptcies, and rising delinquencies, which makes the growth surprising.
Fed easing (rate cuts and slower quantitative tightening) plus commercial bank lending are driving the increase, and a large share of today’s money stock was created since 2009 and especially since 2020.

Currency debasement is a long-running, multi-decade trend that accelerated after currencies were decoupled from gold, and it has generally boosted asset prices and favored people who own assets over those who rely mainly on labor.
The real pain for savers comes from interest-adjusted debasement — when money supply grows faster than bond yields, bondholders lose purchasing power, as seen in the big debasement spikes around 2020–21.
The era of steadily falling long-term interest rates is likely over, so debasement may continue but with a weaker tailwind for valuations; bonds may still lose value in real terms but not as rapidly, and investors should expect different relative performance across stocks, gold, crypto, and housing.

Measuring the price level requires price theory because common price indexes are just approximate constructs and can systematically mis-measure the theoretical concept.
The correct price-level measure is the money cost of a constant-utility bundle, so weights should adjust as consumers substitute and as future/asset prices matter; fixed-weight indexes and the exclusion of asset prices produce substitution bias and other errors.
Those measurement flaws make it harder to test theories of price-level determination and can mislead policymakers, causing noisy empirical results and potential policy mistakes.

The money supply in the economy is growing rapidly, reaching a high not seen in over two years. This growth is mainly driven by government spending rather than strong economic conditions.
Interest rates are being pushed down by the Federal Reserve to help manage the government's large debt. This could lead to future inflation as more money is created to handle increasing deficits.
Despite recent economic growth, many believe it isn't based on solid foundations. The reliance on government spending and credit could pose risks for the economy moving forward.

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