How is M3 Doing These Days?

It has been quite awhile since we checked in with M3 to see the true growth in the money supply. As the government no longer reports it (in order to save money ROFL*), it has to be constructed manually using the relevant report data. As Barry Ritholz from "The Big Picture" reports, capital is being destroyed faster than credit can be created. It is getting ugly!

Money Supply Growth? Its Much Worse Than That!

Credit Collapsing Faster than it can be created:



Courtesy of St Louis Federal Reserve Bank

Signs of economic of economic weakness abound, despite the massive injections of credit and liquidity.

Deep down inside, I suspect Larry realizes that much of the "boom" from 2002 til '07 was driven by the absurdly cheap money -- and not tax cuts, as has been argued by many on his show. Just about everything from share buybacks to M&A to private equity bids to the Housing boom and MEW driven consumer spending to weak dollar led export boom were functions of ultra-low rates. Now, that cycle has ended, and we are seeing the repercussions of the irresponsible policies of Alan Greenspan.