2011-10-16

PBOC vs FRB:A tale of two money supplies

Notice the ramp in the Federal Reserve's M2 at the end of this chart. This has been explained, not as a burst in money supply that's is about to cause inflation, but as European money leaving the banking system and entering U.S. banks. Remember that only recently, some U.S. banks announced slightly negative interest rates, to deal with all the capital flowing in.

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