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Notes -
The incredible growth in M1 happened under Trump.
Don’t really want to redebate these issues. Mostly just wanted a little rebuttal to “Biden was moderate” which both sides claim of their guy.
Fwiw though I don’t M’s do a very good job predicting inflation. Part of this is IOER and other plumbing by the Fed that sterilizes a lot of the production of the M’s created by the Fed.
I don't reasonably see any way to handwave and say that quadrupling the money supply would have no effect on inflation. That seems like one of those things you can only believe after a lot of education.
If that weren't enough, the biggest budget deficit in a hundred years was under Trump, not Biden. https://fred.stlouisfed.org/series/FYFSD
If you don't want to redebate the issues you shouldn't make claims that are at odds with easily observable reality.
It's crazy to blame inflation on Biden when the deficit and money printing happened under Trump, and justify it with a Biden policy that never happened.
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My claims are inline with the economics profession. Bob Elliot had this exact debate on twitter a few months ago and no one though the M’s were predictive.
Also if you look at them we should be having a large amount of deflation right now. Which is obviously false.
And obviously we should have had hyperinflation at some point in the past.
Like I said, a lot of education.
Nevertheless, the fact remains that printing money and deficit spending happened most under Trump. If you don't think either of those cause inflation i don't know what to say.
Does a thought requiring a lot of education or expertise mean that the thought is therefore false?
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For those not familiar, I just want to link this out, because it is genuinely one of the most unhinged graphs you will ever see.
I'd like to see one that shows the pre-May-2020-definition and post-May-2020-definition versions of M1 as two separate lines. With this graph it's hard to tell how much growth is money printing, how much is savings pattern changes, and how much is just semantics. There's just a big gasp when you first see the big May 2020 jump, followed by a big meh when you read the "that part was all just semantics" fine print afterwards.
The FAQ page includes the chart you asked for (up to December 2020), which shows there was a pretty big jump in early 2020, but nowhere near as large as it looks on the official chart (i.e. around 2x instead of around 10x).
That's exactly what I was looking for; thank you!
2x is still more than I'd have guessed based on subsequent inflation (or M2 data, which seems to be applies-to-apples) alone. I wonder to what extent that means the Fed was partly fighting a natural permanent fall in the velocity of money, vs to what extent it means we still have more future inflation "baked in", vs to what extent it means I don't understand macroeconomics. Probably around 3%/2%/95%...
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