Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (16380)	11/20/2004 2:54:20 AM
From: Elroy Jetson	Read Replies (1) of 116555

The AMS is similar to "MZM Percentage change from same period last year", shown below in red, and compared to Shostak's chart: economagic.com home.pacbell.net This is not the money supply. The money supply is not declining. The decline shown in red is the change in the rate at which the money supply increases. This change in velocity is very predictive of recessions. Why? Because even when the money supply does not increase as quickly as it has been (aka new debt is being created less quickly), a Monetarist economy risks sliding into recession because so much of the demand is created by new debt. .

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