enthalpy

Thursday, January 29, 2009


An even scarier picture of the economy. The best part:
9. How large is the M1 money multiplier and what is its recent behavior?

The M1 money supply is currently less than the monetary base. M1, which is primarily currency plus demand deposits, is $1,602 billion. The multiplier is about 0.9 as of 1/14/09.

The M1 multiplier has been about 1.6 in recent years. The drop to 0.9 has occurred starting in late September of 2008. It is due to the greater rise in the monetary base than M1. M1 has risen from $1,392 billion in early September to $1,602 billion at present, or at an annualized rate of about 36 percent a year. The monetary base has risen from $870 billion to $1,774 billion. The annualized rate is about 249 percent.
It's official. There's no money left. Anywhere. Man, that was fun!



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