Tag Archives: Money Veocity

M2 Turns Negative for the First Time and that’s a Long Time!

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.