The Biggest Collapse in the M2 Money Supply Since the Great Depression – Mish Talk

The M1 and M2 numbers are from the Federal Reserve, and the ODL is derived from M2, as shown below.

The M1 and M2 numbers are from the Federal Reserve, and the ODL is derived from M2, as proven beneath.

The above chart information is from the Federal Reserve H.6 Funds inventory reportlaunched on January 24.

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  • M1 consists of (1) forex exterior the US Treasury, Federal Reserve Banks, and depository establishment vaults; (ii) demand deposits in industrial banks (excluding these quantities held by depository establishments, the U.S. authorities, international banks, and official establishments) much less money objects within the technique of gathering and floating the Federal Reserve; and (iii) different liquid deposits, consisting of different Realizable Deposits (or OCDs, which embody Negotiable Withdrawal Order, or NOW, Computerized Switch Service, or ATS), accounts at depository establishments, inventory draft accounts at credit score unions, and deposits below demand in financial savings establishments) and financial savings deposits (together with cash market deposit accounts). Seasonally adjusted M1 is generated by summing forex, demand deposits and different liquid deposits, every adjusted seasonally individually.
  • M2 consists of M1 plus (1) small denomination time deposits (time period deposits in quantities lower than $100,000) minus an Particular person Retirement Account (IRA) and Keogh balances at depository establishments; and (ii) balances in retail cash market funds (MMFs) much less IRA and Keogh balances in MMFs. A seasonally adjusted M2 is generated by gathering small denomination time deposits and retail MMFs, every individually adjusted seasonally, and including the end result to the seasonally adjusted M1.
  • ODL is described beneath

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