{MIKE MAHARREY} Money Supply Expansion: This Is Inflation!
Despite the prevailing notion that the Federal Reserve has implemented “tight” monetary policy, the money supply has expanded by more than $600 billion since its low point in mid-2023.
Based on the “true,” or Rothbard-Salerno, money supply measure (TMS), the money supply expanded by 2.2 percent year-over-year in April. That was up from a 1.4 percent increase in March.
On a month-on-month basis, the money supply grew 0.6 percent from March to April. Over the past year, it has increased month over month during eight of the 12 months.
Economists Murray Rothbard and Joseph Salerno developed the TMS metric to provide a more accurate measure of money supply fluctuations.
Money supply growth as measured by the Fed’s M2 metric is surging even faster. Year-over-year, it grew by 4.5 percent, up from 3.9 percent in March.
As of May, the M2 money supply stood at $21.94 trillion and is above the peak reached during the pandemic.
As you can see from the chart, M2 and the TMS measures both show a similar money supply trajectory – up.
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