There are tons of measuring sticks out there…. almost all of which we look at and follow, at least at one time or another…..
What grabs our attention is when the measuring sticks do unique things….or have never happened before!
M2 – aka Money Supply
According to Investopedia M2 is best described as the following:
M2 is the U.S. Federal Reserve’s estimate of the total money supply including all of the cash people have on hand plus all of the money deposited in checking accounts, savings accounts, and other short-term saving vehicles such as certificates of deposit (CDs). Retirement account balances and time deposits above $100,000 are omitted from M2.
Check out the latest reading of M2
While close in 1994, it stayed positive, for the year 2022… M2 was a negative for the year for the first time ever!
Note also as compared to 1994, the rapid draw down in 2022…
Why are we watching this?
This draw down of money in the system may put pressure on certain risky players i.e. Companies that use Junk or High Yield Debt!
Just a heads up to let you know what we are watching!
Have a Great “M2 Analysis” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
$treet-¢ents 
Banking is all about Confidence … Experienced Reminders and Hat Tip Advanced Analysis Part 2 the M2 Money Supply!
We will leave the drama headlines for other sources, as there are of course many that will come from the recent West Coast Bank Failure….
Being our second major Rodeo on this one, the Great Financial Crisis (aka GFC) of 07-09 the first, we are reminded of several things – This is NOT the 07-09 Crisis – Don’t go there…
Here are some observations:
Advanced Analysis Replay – Pat ourselves on the Back Here
Part 2 of our Advanced Analysis – Recall and Reminder – The M2 Discussion
M2 Turns Negative for the First Time and that’s a Long Time!
Posted on January 18, 2023 by John Kvale CFA, CFP | Leave a comment
There are tons of measuring sticks out there…. almost all of which we look at and follow, at least at one time or another…..
What grabs our attention is when the measuring sticks do unique things….or have never happened before!
Why are we watching this?
This draw down of money in the system may put pressure on certain risky players i.e. Companies that use Junk or High Yield Debt!
Closing Thoughts:
We mostly stay away from these “HOT” or maybe even Negative topics, but wanted to let you know we watch this, have spoken in advance of some of the risks, and are using past experience to help guide and monitor the situation!
Have a Great “Experience Matters” Day!
John A. Kvale CFA, CFP
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Posted in Debt - Debt Management, Economy, FOMC, Interest Rates, Investing/Financial Planning, Market Comments
Tagged Advanced Analysis, FOMC, Interest Rates, M2, Money Supply