FAST FIVE: Collapse In Money Supply Is Still A Major Risk For The Market
It was only the latest week that drove the month to be positive.
Figure: 8 YoY M2 Change with CPI and Fed Funds Historical Perspective The charts below are designed to put the current trends into a historical perspective.
Mr Wenzel proposed that large drops in Money Supply could be a sign of stock market pullbacks.
His theory, derived from Murray Rothbard, states that when the market experiences a shrinking growth rate of Money Supply (or even negative) it can create liquidity issues in the stock market, leading to a sell-off.
They are raising rates and crashing the money supply, but they have not come close to undoing all the damage done in 2020 and 2021 (much less the last decade).