Tag Archives: Money multiplier

This Rhyme Is Different: Base Money > M1

“History doesn’t repeat itself but it often rhymes.” –  Mark Twain (maybe) We have been speaking a lot about how the liquidity in the market today is different than in the past.   The chart below reflects this better than … Continue reading

Posted in Economics | Tagged , , , | 23 Comments

Would A Trader Buy This Chart?

Note the bottoming of the M1 money multiplier after its long secular decline.  The multiplier is effectively the ratio of money created by the banking system (deposits) vs. money created by the central bank (reserves). It collapsed and fell to … Continue reading

Posted in Monetary Policy | Tagged , | 4 Comments