The Money Supply Is Growing Again and the Fed Wants It that Way
Money-supply growth fell year over year again in March, but March’s decline was the smallest money-supply drop recorded in sixteen months. Moreover, the money supply in March grew—month over month—by the highest rate in two years.
The current trend in money-supply growth suggests a continued turnaround from more than a year of historically large contractions in the money supply. As of March, the money supply appears to be in a period of stabilization. The money supply is still flat or down on a year-over-year basis, but there is clear growth over the past several months.
Money-supply growth has now been negative—year over year—for seventeen months in a row. During March 2024, the downturn continued as YOY growth in the money supply was at –2.57 percent. That’s up from February’s rate of decline which was of –5.76 percent, and was a much smaller rate of decline than that of March 2023 which had a rate of –9.87 percent. With negative growth now lasting more than a year and coming in below negative five percent for most of the past the past year and a half, money-supply contraction is the largest we’ve seen since the Great Depression. Prior to 2023, at no other point for at least sixty years had the money supply fallen by more than 6 percent (YoY) in any month.
Those dramatic drops in the money supply appear to be over for the time being. Indeed, when we look at month-to-month changes in the money supply, we find that the money supply increased 0.98 percent from February to March. That’s the largest growth rate since March 2022. In month-to-month measures, money supply growth has been positive during seven of the last ten months, further suggesting that the new trend in money supply is either flat or returning to sustained upward growth..
The money supply metric used here—the “true,” or Rothbard-Salerno, money supply measure (TMS)—is the metric developed by Murray Rothbard and Joseph Salerno, and is designed to provide a better measure of money supply fluctuations than M2. (The Mises Institute now offers regular updates on this metric and its growth.)
In recent months, M2 growth rates have followed a similar course to TMS growth rates, although TMS has fallen faster than M2 in the year-over-year measures. In March, the M2 growth rate was –0.28 percent. That’s up from February’s growth rate of –1.82 percent. March 2024’s growth rate was also up from March 2023’s rate of -3.74 percent. Moreover, M2 also shows more overall growth than TMS, with M2 increasing by 1.10 percent from February to March this year.
Money supply growth can often be a helpful measure of economic activity and an indicator of coming recessions. During periods of economic boom, money supply tends to grow quickly as commercial banks make more loans. Recessions, on the other hand, tend to be preceded by slowing rates of money supply growth.
It should be noted that the money supply does not need to actually contract to signal a recession. As shown by Ludwig von Mises, recessions are often preceded by a mere slowing in money supply growth. But the drop into negative territory we’ve seen in recent months does help illustrate just how far and how rapidly money supply growth has fallen. That is generally a red flag for economic growth and employment.
All that said, recessions tend not to become apparent until after the money supply has begun to accelerate again after a period of slowing. This was the case in the early 1990’s recession, the Dot-com Bust of 2001, and the Great Recession.
In spite of last year’s sizable drops in total money supply, the trend in money-supply remains well above what existed during the twenty-year period from 1989 to 2009. To return to this trend, the money supply would have to drop another $3 trillion or so—or 15 percent—down to a total below $15 trillion. Moreover, as of March, total money supply was still up more than 30 percent (or about $4.5 trillion) since January 2020.
Since 2009, the TMS money supply is now up by more than 185 percent. (M2 has grown by 145 percent in that period.) Out of the current money supply of $19 trillion, $4.6 trillion—or 24 percent—of that has been created since January 2020. Since 2009, more than $12 trillion of the current money supply has been created. In other words, nearly two-thirds of the total existing money supply have been created just in the past thirteen years.
With these kinds of totals, a ten-percent drop in the money supply only puts a small dent in the huge edifice of newly created money. The US economy still faces a very large monetary overhang from the past several years, and this is partly why after seventeen months of negative money-supply growth, we have only seen a slowdown in employment for the past several months. (For example, full-time job growth has turned negative while the total number of employed workers has been flat since late 2023.) Moreover, CPI inflation remains well over the two-percent target rate, and mainstream economists’ predictions of significant “disinflation” have been wrong.
The Fed and the Federal Government Need Lower Interest Rates
The Federal Reserve (as with most central banks) is motivated by two conflicting political challenges. The first is price inflation. Regimes fear high levels of price inflation because high inflation is known to lead to political instability. One way that central banks fight price inflation is to allow interest rates to rise.
The second challenge is found in the fact a regime’s central bank is expected to help the regime issue debt and engage in deficit spending. Central banks’ main tool in offering this help involves keeping interest rates on government debt low. How do central banks do this? By buying up the government’s debt, thus artificially boosting demand for the government’s debt and pushing interest rates back down. The problem is that buying up government debt usually involves creating new money, thus putting upward pressure on price inflation.
So, in times of rising price inflation, central banks face two contradictory tasks: keeping price inflation low while also keeping interest rates low.
This is where the Federal Reserve is right now. In spite of the fact that the predicted “disinflation” has not materialized—and CPI inflation is not headed back to two percent—the Fed in recent weeks has made it clear it has no plans to raise its target policy interest rate. Politically speaking, the Fed can’t let interest rates rise because the Fed is expected to prevent any significant increases in interest paid—i.e., yields— on government debt.
Last week, Daniel Lacalle explained some of the details of the problem:
The decision of the Fed [to not further tighten the money supply] comes when the global demand for Treasuries is under question. Foreign holdings of Treasuries have risen to an all-time high, but the figure is misleading. Demand has weakened relative to the supply of new bonds. In fact, an expected surge in new issuances by the Treasury creates a headache for the Federal Reserve. Borrowing will be significantly more expensive when public debt interest payments have reached $1 trillion, and investor demand remains robust but not enough to keep pace with an out-of-control deficit. China’s holdings of US Treasury bonds have fallen for two consecutive months to $775 billion, according to the US Department of the Treasury, and Japan’s weak yen may need a Bank of Japan intervention to sell US reserves, which means disposing of Treasury bonds.
Given all this, it’s rather surprising that money-supply growth did not turn positive sooner than it did.
What the Fed is doing now is probably best described as a “wait and hope” strategy. The Fed is refusing to allow interest rates to rise, but the Fed isn’t lowering the target rate either. Rather, it appears the Fed is holding the target rate steady just hoping that something will happen to bring Treasury yields back down without the Fed having to print more money to buy more Treasuries and risking a new, politically damaging surge in price inflation. “Hoping” is not much of a strategy, however, and the likely outcome is that the Fed will err on the side of keeping interest rates low so the regime can borrow more money. This will mean more price inflation for ordinary people.
Economist Peter Schiff Predicts A Financial Crisis That Will Make The Great Depression Look Tame
International Criminal Court Seeks Arrest of Netanyahu & Hamas Leaders for War Crimes & Crimes Against Humanity
The International Criminal Court (ICC) is seeking the arrest warrants for Israeli and Hamas leaders, including Prime Minister Benjamin Netanyahu, for war crimes in Gaza.
The ICC’s chief prosecutor Karim Khan on Monday accused Netanyahu, Israeli Defense Minister Yoav Gallant, and three Hamas leaders — Yehia Sinwar, Mohammed Deif and Ismail Haniyeh — of war crimes and crimes against humanity in the Gaza Strip and Israel.
Statement of ICC Prosecutor Karim A.A. Khan KC:
— DD Geopolitics (@DD_Geopolitics) May 20, 2024
Based on the evidence collected and examined by my Office, I have reasonable grounds to believe that Benjamin NETANYAHU, the Prime Minister of Israel, and Yoav GALLANT, the Minister of Defence of Israel, bear criminal… pic.twitter.com/0FpcRtv8ED
The ICC’s announcement from The Hague represents a symbolic blow to Israel’s credibility in the conflict since they’ve justified their military response in Gaza following Hamas’ surprise attack on Oct. 7.
Khan issued the following statement:
On the basis of evidence collected and examined by my Office, I have reasonable grounds to believe that Yahya SINWAR (Head of the Islamic Resistance Movement (“Hamas”) in the Gaza Strip), Mohammed Diab Ibrahim AL-MASRI, more commonly known as DEIF (Commander-in-Chief of the military wing of Hamas, known as the Al-Qassam Brigades), and Ismail HANIYEH (Head of Hamas Political Bureau) bear criminal responsibility for the following war crimes and crimes against humanity committed on the territory of Israel and the State of Palestine (in the Gaza strip) from at least 7 October 2023:
- Extermination as a crime against humanity, contrary to article 7(1)(b) of the Rome Statute;
- Murder as a crime against humanity, contrary to article 7(1)(a), and as a war crime, contrary to article 8(2)(c)(i);
- Taking hostages as a war crime, contrary to article 8(2)(c)(iii);
- Rape and other acts of sexual violence as crimes against humanity, contrary to article 7(1)(g), and also as war crimes pursuant to article 8(2)(e)(vi) in the context of captivity;
- Torture as a crime against humanity, contrary to article 7(1)(f), and also as a war crime, contrary to article 8(2)(c)(i), in the context of captivity;
- Other inhumane acts as a crime against humanity, contrary to article 7(l)(k), in the context of captivity;
- Cruel treatment as a war crime contrary to article 8(2)(c)(i), in the context of captivity; and
- Outrages upon personal dignity as a war crime, contrary to article 8(2)(c)(ii), in the context of captivity.
In an interview with CNN on Monday, Khan claimed the court had accumulated a “variety of evidence” to support the arrest warrant request.
Israeli leaders condemned the ICC’s move as antisemitic and a “historic disgrace.”
“The absurd and false order of the prosecutor in The Hague is not only directed against the Prime Minister of Israel and the Minister of Defense – it is directed against the entire State of Israel,” Netanyahu responded in a statement.
??NETANYAHU TO ICC: HOW CAN YOU COMPARE ISRAEL TO HAMAS?! ARE YOU INSANE?!
— Mario Nawfal (@MarioNawfal) May 20, 2024
“The absurd and false order of the prosecutor in The Hague is not only directed against the Prime Minister of Israel and the Minister of Defense – it is directed against the entire State of Israel.
It… https://t.co/lAlfr3iOte pic.twitter.com/ghk0Kbq9C1
“With what audacity do you dare compare the monsters of Hamas to the soldiers of the IDF, the most moral army in the world?!”
The Biden administration likewise condemned the ICC’s “outrageous” announcement.
“The ICC prosecutor’s application for arrest warrants against Israeli leaders is outrageous,” Joe Biden wrote. “And let me be clear: there is no equivalence between Israel and Hamas. We will always stand with Israel against threats against its security.”
JUST IN!! Blinken statement on ICC arrest warrants for senior Israeli officials, together with warrants for Hamas terrorists. ?? pic.twitter.com/Nvy8kGWrXo
— Alex Raufoglu (@ralakbar) May 20, 2024
Hamas also denounced the ICC prosecutor’s announcement, saying it “equates the victim with the executioner.”
A panel of three judges will decide whether to issue the arrest warrants and allow a case to proceed, which may take a couple months.
Since Israel is not a member of the court, Netanyahu and Gallant do not face any immediate risk of prosecution even if the arrest warrants are issued.
Netanyahu has suffered in the polls since Israel launched its counteroffensive against Hamas in Gaza, with 57% of the Israeli public rating his performance as “poor or very poor.”
“This is going to make Netanyahu an outcast, and his ability to move around the world will be seriously compromised,” said Yuval Shany, international law expert at Hebrew University and the Israel Democracy Institute, adding that other countries may now be more reluctant to provide assistance.
Over 35,000 Palestinians have been killed in Gaza since Israel launched its brutal campaign to dismantle Hamas after its Oct. 7 attack that killed roughly 1,200 people.
Watch the ICC’s full announcement:
‘You Stole From The Trump Organization, Correct?’: Michael Cohen Hands Trump Prosecution Another Terrible Day
Prosecutors in Donald Trump’s New York ‘hush money’ trial may have colluded with the Biden administration, but apparently none of the galaxy brains involved in the case thought far enough to consider that their star witness, Michael Cohen, might cause their ‘case’ to implode.
To wit: last week, Cohen was ‘dog walked‘ through several lies he’s told over the past few years.
Today: Cohen admitted he stole from the Trump Organization.
During cross-examination, Cohen admitted that he lied to former Trump Organization CFO Allen Weisselberg in 2017 about how much he needed to be reimbursed for a payment to RedFinch, a tech company that provided services to the Trump Org.
While he asked for $50,000, Cohen only paid the company $20,000 – pocketing the difference.
“You stole from the Trump Organization, correct?” defense attorney Todd Blanche asked.
“Yes sir,” Cohen replied.
This just got interesting: Michael Cohen is now admitting to stealing money from our company.
— Eric Trump (@EricTrump) May 20, 2024
When Blanche then asked if he ever repaid the Trump Organization, or “Did you ever have to plead guilty to larceny?” Cohen replied, “No sir.”
Nonetheless, Cohen asked for the 50K reimbursement from the Trump Organization.
— Anna Bower (@AnnaBower) May 20, 2024
So you stole? Yes, Cohen admits.
And you’ve never paid the Trump Organization back for the money you stole from it? No.
You lied to Weisselberg about the amount owed to you for Redfinch? Yes
Cohen had asked for the $50,000 reimbursement alongside the $130,000 he paid personally to Stormy Daniels ahead of the 2016 election for a nondisclosure agreement.
The former attorney then said he went to the bank and took out cash over several days, totaling about $20,000 before keeping it in a small brown paper bag. Then he gave it to the tech firm, he testified, adding he never gave the full $50,000 amount.
The Trump Organization ultimately repaid Mr. Cohen $50,000 and then doubled that payment in a practice known as “grossing up” to cover taxes he’d incur by declaring the money as income rather than a tax-free reimbursement.
Mr. Blanche noted that despite Mr. Cohen’s guilty pleas in 2018 to federal charges including a campaign finance violation for the hush money payment and unrelated tax evasion and bank fraud crimes, he’d never been charged with stealing from President Trump’s company. –Epoch Times
They really aren’t sending their best…
He’s not only a liar but a thief https://t.co/omudhKMfuY
— Sara A. Carter (@SaraCarterDC) May 20, 2024
Ron Paul: The Vietnamization of Ukraine
As Ukraine’s defeat in the war moves closer, the neocons are desperate to draw the US further into the fight. Over the weekend, former US State Department official Victoria Nuland told ABC News that the US must help facilitate Ukrainian missile attacks deep inside Russian territory. The Biden Administration has to this point avoided involvement in such attacks, likely because Russian president Vladimir Putin has warned that Russia will strike any facility that supplies or facilitates strikes inside of Russia, wherever they may be.
It’s a clear warning from a nuclear power, but as Nuland and her fellow neocons see their Ukraine project failing, they demand escalation. This is just what they did in their previous disastrous projects like the Iraq War, the attacks on Syria and Libya, and the 20-year occupation of Afghanistan. For them the failure is never because it was a bad idea in the first place, but that not enough lives and resources were poured into that bad idea to create a good outcome.
But Russia is no Iraq nor is it Libya. This time they are playing with World War III and nuclear destruction and no one in DC seems concerned.
Last Thursday the Chairman of the Joint Chiefs of Staff, Charles Q. Brown, said that NATO trainers deployed within Ukraine was inevitable. “We’ll get there eventually, over time,” he said. This, of course, is exactly how we got the Vietnam War, but Russia in 2024 is hardly late -1950s Vietnam. Russia of today is a country that can fight back and can project military power all the way to the source, which means the United States.
Is Nuland’s Ukraine project worth dying in a nuclear war over?
The whole US involvement in this proxy war has been based on lie after lie. They said we had to help Ukraine defeat Russia because democracy itself was at stake. Then Ukrainian president Zelensky cancelled elections, so they told us we have to help Ukraine defeat Russia because Putin won’t stop there – he’ll soon be marching through Berlin, London, and maybe even New York!
Doesn’t it remind you of how the neocons were warning us that Saddam was going to attack the US mainland with drones and that he was operating mobile weapons labs? Anything to get the public on board for their war.
The fact is the neocons and warmongers lie constantly. They will do whatever it takes to get their wars and sadly we do not have an independent media in the US to challenge them on their lies. Our media is so closely tied to the military-industrial complex that it is also a stakeholder in war profits, so they aren’t about to rock the boat.
Anyone who thinks we cannot get sucked into another war like we were with George W. Bush’s lie that Saddam Hussein had weapons of mass destruction is not paying attention. It is happening again, in real time.
The fact is we live in a deeply corrupt society dominated by individuals who do not believe in truth. When you don’t believe in truth you will have no qualms about manipulating others to do your will. So unless they are stopped, neocons like Nuland will demand more attacks on Russia, more US troops in Ukraine, more escalation. Until Russia fights back. Then it will all be over. Is this what we want?
This article first appeared at RonPaulInstitute.org.
Warmonger Victoria Nuland Pushes For Strikes On Russian Bases
ABC News’ Martha Raddatz talked with ex-Biden administration Under Secretary of State for Political Affairs Victoria Nuland about the war between Russia and Ukraine on Sunday.
During the interview, Nuland claimed America needs to give EVEN MORE military support to Ukraine since Russia is clearly winning the fight.
She told Raddatz, “They need to be able to stop these air attacks that are coming from bases inside Russia. So, I think there’s also a question of whether we, The United States and our allies, ought to give them more help in hitting Russian bases which we’ve not been willing to do.”
Asked if she thinks Ukraine should strike military bases inside Russia, Nuland confirmed she does and blamed Russia for “escalating” the war.
Raddatz pointed out the Biden administration believes Ukraine striking Russian bases would escalate the war and drag the U.S. further into the conflict.
“So, why do you think that’s a good idea?” Raddatz bluntly asked Nuland.
The former Biden official again suggested Russia, not the U.S. or Ukraine, is escalating the war.
Nuland went on to bizarrely claim Russian President Vladimir Putin wants to “restore the Soviet Union” and that he’s “willing to sacrifice the future of Ukraine and the Russian people” for his “crazy imperial ambition.”
She added, “I think the Covid period when he was in isolation just made him more and more paranoid.”
Regarding Republicans and the millions of American citizens who don’t support the country funding Ukraine’s fight, Nuland promoted the unsupported theory that Putin won’t stop at Ukraine and will begin invading NATO countries next.
The relentless warmonger also pointed out the military-industrial complex is making a fortune off the war, bragging the weapons manufacturers supplying Ukraine with weapons employ people in 30 U.S. states.
Internet users roasted the globalist warhawk:
“Queen of Darkness” Victoria Nuland is back, demanding that the US openly facilitate strikes by Ukraine on targets inside Russia — something the Biden Administration had previously insisted would never happen. A once-unfathomable escalation, which now barely raises an eyebrow pic.twitter.com/11BF95xO7C
— Michael Tracey (@mtracey) May 19, 2024
WAR: Disgraced warmonger Victoria Nuland is calling to direct strikes against Russia. She is desperate to have US troops in Eastern Europe to protect her interests in Ukraine. pic.twitter.com/Prf5nldxu2
— @amuse (@amuse) May 20, 2024
ARREST Victoria Nuland for Biological War Crimes, Treason, Genocide and using CIA Colour Revolutions to overthrow Foreign Governments.
— Liz Churchill (@liz_churchill10) May 20, 2024
Obama’s 4th Branch of Government requires complete decimation. pic.twitter.com/MatVate09K
This crazy woman wants us to attack Russia.
— Sean Parnell (@SeanParnellUSA) May 20, 2024
If you’re one of those people with a Ukrainian flag in your bio I hope you’re ready to send your own kids to fight in Ukraine.
Because it will happen if Nuland gets what she wants. https://t.co/pl0Kk7myZj
Oh, look, war loving Victoria Nuland wants America to help Ukraine target bases inside Russian territory.
— Vince Langman (@LangmanVince) May 20, 2024
Is there a more evil woman on planet Earth than this neocon psychopath? pic.twitter.com/0FBGj0GDqf
Congo Coup? African Nation Says 3 Americans Involved In Thwarted Takeover Attempt
Reports out of the Democratic Republic of Congo (DRC) allege three U.S. citizens participated in a plot to attack the nation’s presidential palace and eventually take over the country.
The footage below is being shared online, reportedly showing some of the Americans being arrested by the Congolese Army.
BREAKING? CIA Agents arrested in the CONGO!
— Syrian Girl ?? (@Partisangirl) May 19, 2024
The Democratic Republic of Congo’s (DRC) armed forces repelled an attempted coup d’etat involving Congolese and foreign fighters on Sunday morning, a DRC army spokesperson said in a televised address. The army announces the arrest of… pic.twitter.com/AB48ngn2D1
The moment Christian Malanga Son and an American Man were captured by the Republican Guard after their aborted coup d’état in Congo ??. They hid near the river so they could cross late at night to Brazzaville ??. pic.twitter.com/RRjM3XXEB9
— Typical African (@Joe__Bassey) May 20, 2024
CBS News reports, “The Democratic Republic of Congo’s army said it foiled a coup attempt early Sunday and arrested the perpetrators, including several foreigners, following attacks on the presidential palace and the residence of a close ally of Congo’s president that left three people dead in the capital, Kinshasa. Officials said three U.S. nationals were among those behind the alleged plot, but their identities and whereabouts remained unclear Monday morning.”
In total, fifty people were arrested for taking part in the failed coup d’ etat that was initiated by opposition leader Christian Malanga.
According to the New York Post, Malanga was shot and killed during the attack on government buildings.
At least two police officers also died after being shot in the melee.
One of the American men being arrested in the footage above is said to be Malanga’s son.
President Felix Tshisekedi was being targeted in the assault, with Christian Malanga saying in a social media video just before he was killed, “Felix, you’re out. We are coming for you.”
The American ambassador to the DRC issued a message about the incident on X, writing, “I am shocked by the events of this morning and very concerned by reports of American citizens allegedly involved. Please be assured that we will cooperate with the DRC authorities to the fullest extent as they investigate these criminal acts and hold accountable any U.S. citizen involved in criminal acts.”
Je suis choquée par les événements de ce matin et très préoccupée par les rapports faisant état de citoyens américains prétendument impliqués. Soyez assurés que nous coopérerons avec les autorités de la RDC dans toute la mesure du possible alors qu’elles enquêtent sur ces actes…
— Ambassadeur Lucy Tamlyn (@USAmbDRC) May 19, 2024
This appears to be the third hit on a world leader this week as the President of Iran was killed in a helicopter crash over the weekend and the Prime Minister of Slovakia was shot by an attempted assassin last Wednesday.