I usually leave my money supply discussions for the EPJ Daily Alert, but there are serious developments with regard to money supply growth (or lack thereof) that are important enough that everyone should be aware of.
Late last year, money supply (M2) growth was moving along at an annualized 14% growth rate. It has been slowly decelerating. The, 13-week average for the latest 13 week period is nwt at only 5.4%. Most shocking is that the simple annualized growth over the last 3 months (non-seasonally adjusted) now shows a shrinkage in money supply. The growth rate is negative at -1.9% on an annualized basis.
Part of the decline,I believe, is the result of hot money flows in combination with the way the Fed is targeting the Fed funds rate. This hot money could reverse direction at any time and spike money supply upward. The Fed could also start some kind of QE3 and boost money supply, but if one of these events doesn't occur, Ben's latest manipulated economic boom and manipulated stock market will come crashing down hard very fast.