Money supply growth fell again in August, remaining deep in negative territory after turning negative in November 2022 for the first time in twenty-eight years.
Since April 2021, money supply growth has slowed quickly, and since November, we've been seeing the money supply repeatedly contract year over year.
During August 2023, the downturn continued as YOY growth in the money supply was at -10.8 percent.
The money supply metric used here-the "True," or Rothbard-Salerno, money supply measure-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.
Recessions, on the other hand, tend to be preceded by slowing rates of money supply growth.
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.
The fact that the money supply is shrinking at all is remarkable because the money supply in modern times almost never gets smaller.
https://mises.org/wire/credit-tightens-money-supply-falls-ten-months-row
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