Thursday, November 7, 2013

Pretty obvious...Fed has no control over the money supply

To all those who say, "The Fed is printing money and it controls the money supply and it's debasing the currency and causing inflation" and whatever else...

Here is a chart of the monetary base against M2. As you can see, the base (which the Fed has direct control over) had zero correlation with M2.

Zero correlation.

2 comments:

Matt Franko said...

looks like M2 has been here there and everywhere and now back to about where it was pre GFC...

rsp,

PeterP said...

Matt,
For M2 we are looking at y-o-y changes in %. So it is not at the 2007 level.