Hughesair (Inflection Point)

Retired physician and air taxi operator, science writer and part time assistant professor, these editorials cover a wide range of topics. Mostly non political, mostly true, I write more from experience than from research and more from science than convention. Subjects cover medicine, Alaska aviation, economics, technology and an occasional book review. The Floatplane book is out there. I am currently working on Hippocrates a History of Medicine and Globalism. Enjoy!

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Friday, July 10, 2020

M1 Money Supply

      From October 2019 to May 2020, the M1 grew from 3.9345 to 5.063 trillion dollars, a 28.68% increase.
      The COVID19 stimulus took several forms, some as direct distribution through the IRS. That direct distribution at least went to the buy side of the market. Treasure‚Äôs repurchase of bonds, however, flooded the investment market with liquidity. The stock market response is obvious. Given an unchanged valuation of equities, their diluted-dollar value continues higher and will continue to do so as long as credit easing continues.
      Estimated GDP2020 20.140 trillion, divided by M1 5.063 = velocity or turnover rate of only 3.98. So, despite the liquidity in the stock market, the economy is turning over at a very sluggish rate.

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