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A comment on Money Creation: 344% in the Last 12mo (Fed, M1, $). Parent comment
This is largely a function of a re-categorization of certain types of accounts: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
From what I can understand a lot of accounts that used to be categorized as M1 are now categorized as M2.
M1 is a component of M2. So to get a better understanding of the real impact we should look at how M2 has changed: https://fred.stlouisfed.org/series/M2NS
The increase in M2 is around 25%.
Still pretty substantial and it looks to be way beyond the historical norm, so I think we should be concerned.
But maybe we should re-calibrate our concern by an order of magnitude.
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This is largely a function of a re-categorization of certain types of accounts: https://fredblog.stlouisfed.org/2021/01/whats-behind-the-rec...
From what I can understand a lot of accounts that used to be categorized as M1 are now categorized as M2.
M1 is a component of M2. So to get a better understanding of the real impact we should look at how M2 has changed: https://fred.stlouisfed.org/series/M2NS
The increase in M2 is around 25%.
Still pretty substantial and it looks to be way beyond the historical norm, so I think we should be concerned.
But maybe we should re-calibrate our concern by an order of magnitude.