The more credit (debt) you put into "money supply", the
flatter it gets. Here is everything.
shadowstats.com
nowandfutures.com
This chart is the banner of deflationists, because it
reflects debt collapse and credit destruction. Then
of course, money supply is growing at all levels, but
flat at the broadest levels, while velocity
is collapsing (there is no magic there, it's a ratio
of the broader money supply to M0 or something like
that), so there is no monetary deflation, not at all,
at least, not yet. The transmission mechanism from MZM
to credit is broken, which is what velocity
chart and slower monetary growth at broader levels
reflect. Of couse, if it gets fixed somehow, we'll see a
major inflation. We will still have a moderate to
high inflation without it ever getting fixed, provided
that debt destruction at the broadest level is not
allowed to take over, i.e., Fed prints faster than
we deflate. My answer to those who advocate
deflation - Yes, he can! -vbg-.
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