1) Contracting money provide + inflation is an unpleasant mixture.
As it method there are fewer greenbacks floating round within the device to pay for the upper costs. ❌💵
In the future the device “breaks” & a deflationary crash happens.
— Nick Gerli (@nickgerli1) March 8, 2023
3) All it took was once a -2% contraction within the money provide in 1921 to motive that deflationary melancholy.
And we are already at -2% contraction these days in 2023.
Suggesting that the resilience of our economic system and the present inflation is probably not as sturdy as other folks assume.
— Nick Gerli (@nickgerli1) March 8, 2023
5) However historic file is apparent: Depressions/Deflation are not looking for a “linear” lower in money provide to happen.
It simply must be a bit bit. 2-4% contraction YoY. After which issues happens.
— Nick Gerli (@nickgerli1) March 8, 2023
7) Now the Fed is doing “Quantitative Tightening”.
This QT is what is inflicting the money provide to contract in 2023.
Everybody’s thinking about price hikes. However it is the QT/Money Provide they must be being attentive to.
— Nick Gerli (@nickgerli1) March 8, 2023
U.S. 🇺🇸
LAYOFFS percent.twitter.com/tVRPh3lDfZ— Win Sensible, CFA (@WinfieldSmart) March 9, 2023
CONSTRUCTION 🚧
OPENINGS percent.twitter.com/TlR6mEle6x— Win Sensible, CFA (@WinfieldSmart) March 9, 2023
