Recession Risk Grows After Money Supply Shrinks At Fastest Pace Since Great Depression

 The U.S. money supply contracted for the third consecutive month, and is declining at the fastest pace since the Great Depression, new Federal Reserve data show.

In February, the M2 money supply-a benchmark for how much cash, bills, bank deposits, coins, and money market funds are circulating throughout the national economy-tumbled 2.24 percent from the same time a year ago, down from negative 1.7 percent in January.

Early indicators point to another contraction in March, as the M2 money supply tumbled 3.13 percent year over year for the week ending March 6.

Despite the year-over-year percentage decline, the money supply remains nearly 38 percent above the pre-pandemic level.

"We have not seen money supply declines like this since the Great Depression," said Mike Shedlock, an economist and registered investment advisor for SitkaPacific Capital Management.

"Due to the Fed's monetary mismanagement, the M2 money supply is falling at its fastest rate since the 1930s," he stated.

"Whereas the risk of a U.S. recession over the coming year was at around 70 percent a few months ago, perhaps it is now up to an 80 percent chance," he wrote in a note.

https://www.theepochtimes.com/recession-risk-grows-after-money-supply-shrinks-at-fastest-pace-since-great-depression_5187430.html