retired aviator

M2 Money Supply Indicates No Shortage

Good article. It's hard to tell for sure if money growth is good or bad, though. For credit-worthy folks taking advantage of historic interest rate lows to borrow, it's good. I'm also not worried about lenders standards for creditworthiness - not anymore!

What the M2 doesn't tell us is how much money growth has come from Fed open market purchases, rather than lending. This cash being created could be a bad thing, meaning the demand for Treasuries is partly artificial, and the cash creation is not from confidence of lenders and willingness of borrowers, but rather something potentially troubling going on with Treasuries.