So it probably increases wealth inequality. And that's probably people who are already rekt. Many people who don't have access to, or the knowledge or time to invest in the stock market and they'll feel the biggest negative effects from inflation. But it's complicated matter so we're not sure.īy investing in the stock markets, even if there's lots of inflation, at least my money stays the same value. My conclusion is, adjusting the stock market for the money supply doesn't tell the whole story, but it does tell that there's a lot of money printing going on and if that continues we're probably making a lot of people poorer. I submitted it to HN and it went to the front page: The reactionsĪs always HN'ers had were very opinionated. Even with those you can see the effect though. M1 is a limited measure as it only includes physical money and bank accounts. Instead we're almost at the lowest point since the pandemic started. The visual above is already quite telling, if you adjust for M1 (the red line) the markets have crashed early 2020 when COVID hit. and adjust the length of time the chart goes back. You can choose between M1, M2, MB and adjust the S&P500, the Dow Jones DJI, etc. The top boxes are select boxes and you can adjust what you want to see and it live updates. I made it very simple inspired by Stonks in BTC. It imports the data from the sheet into a SQLite db and puts the data in a ChartJS page. Then I made a site around it called (and now renamed it to ). I downloaded the data from the Fed and put it in a Google Sheet: And make a site Or was it just the printing of money and actually the numbers went up but the intrinsic value stayed the same? Let's find the data Thinking about this I wondered if my stock and ETF investments actually went up this year. The intelligentiae, libertarian and crypto people say this is causing inflation (your money becomes worth less). What that means for inflation is heavily argued about by different sides. The M1 money supply has almost doubled since. Since the COVID19 pandemic started, the printing has gone to a whole different level though. This is called Quantitative Easing (QE) and is a way to keep economies afloat if they go through bad times. Quantitative EasingĪs you see, since the 2008 Financial Crisis the supply has grown a lot, this means the Fed has essentially printed money and injected it into the economy (usually by investing in the markets). There's a few more measurements like M2 and MB, which is the total Monetary Base, e.g. M1 roughly means the U.S.-dollar money supply consisting of physical currency and what's in bank accounts. This week I kept looking at the M1 money supply chart on the Fed's website: Portions of this page are reproduced from work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.TL:DR I made a site called to see if stock markets actually grew when you discount for inflation by the Fed printing record amounts of money from thin air. Learn about cookies and how to remove them. Removal of cookies may affect the operation of certain parts of this website. This website uses cookies to obtain information about your general internet usage. App Store is a service mark of Apple Inc. Apple, iPad, and iPhone are trademarks of Apple Inc., registered in the U.S. Telephone calls and online chat conversations may be recorded and monitored. CMC Markets UK Plc and CMC Spreadbet plc are registered in the Register of Companies of the Financial Conduct Authority under registration numbers 173727. CMC Markets Germany GmbH is a company licensed and regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) under registration number 154814. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.ĬMC Markets is, depending on the context, a reference to CMC Markets Germany GmbH, CMC Markets UK plc or CMC Spreadbet plc. 77% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
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