Select Page

M2 Money Supply

Economics and Currency

 

Sponsored Content

 

steemit

Visit on Steemit!

Support us on Steemit!

bitcoinlgoo

Visit on D.Tube!

Support us on D.Tube!

Curriculum Content

 

Leading/Coincident/Lagging: Leading Economic Indicator
Type: Measurement

Summary: M2 money supply is an important economic policy measurement, and is worth tracking on a weekly basis if available. M2 measures increase or decrease in the money supply, and is controlled by central banks increasing or decreasing banking reserves.

Increasing the reserves allows retail and commercial banks to treat their deposits at the central bank as a multiple of their actual value. The central bank “credits” the deposit accounts commercial banks have at the central bank as larger than their prior value. The commercial banks can now originate more loans, which allows more money to go into circulation. This stimulates the economy’s growth by making credit and currency easier to obtain. Decreasing the reserves lowers the allowed multiple of deposits, restricting money from going into circulation, and slows from the economy.

Manipulation of M2 helps Central Banks control GDP growth and inflation more directly and directly changes currency value. A positive change in M2 money supply is caused by increased reserves and leads a rise in GDP and inflation. A negative change in M2 money supply is caused by decreased reserves and leads a fall in inflation and a fall in GDP.

Money Supply (M2)Change Versus Previous
M2 Rises, RGDP Growth StimulatedM2 Accelerated, RGDP Stimulated More.
M2 Falls, RGDP Growth SlowedM2 Slows, RGDP slowed more.
As M2 rises, Inflation Rises.M2 accelerates, Inflation rises quicker.
As M2 falls, Inflation Falls.M2 slows, Inflation rises slower.
All information is general, not absolute. Invest using total economy, not one indicator.
RGDP – Real Gross Domestic Product

Impact on Local Currency: A sharp rise in M2 money supply may cause foreign investors to sell a currency inflation is rising without a rise in GDP. A sharp fall in M2 money supply is deflationary, increasing the value of that currency relative to other currencies, but not if attached to declines in GDP. Note that M2 Money supply rarely if ever declines for the United States, and is usually intentionally accelerated by the central bank to help the economy recover.

Did we help you? Vote with a Crypto-Donation!
steemit

Visit on Steemit!

Support us on Steemit!

bitcoinlgoo

Donate Bitcoin

141FSmuHkMSZVsQQtE9GHSPyj6gAonqqWR

bitcoinlgoo

Donate Dash

Xr4fdtP78Mh3gnVwAUjjuZRCq3kubaHZ5o

bitcoinlgoo

Donate Litecoin

LcrxGsshB2j9SddnZNdLfYMsDqAtw3Dr9v

bitcoinlgoo

Donate Iota

LXIVNBVHRYBOHRWNGMBNHOYMT9GBEFTPQMKDUZUYYHGMPXOOEYETMUQZXWXCGWBMTFERLW9LMCKNUDCKAMDOQCNDNZ

bitcoinlgoo

Visit on D.Tube!

Support us on D.Tube!

bitcoinlgoo

Donate Bitcoin Cash

14NCVeGCZfHf7tiy9N2Yz1mrBNi9m2mQ4S

bitcoinlgoo

Donate Ethereum

0xAF7d66B09F34833Ccec1Ed9e4D356D40c09698e5

bitcoinlgoo

Donate Ripple

raiZ2rCXLeBTUh2A4voKALZpMxQ88KxZxm

bitcoinlgoo

Donate Monero

42byh9AjzB3XXRptSeSfzAGC588HRZgVXAGMay6yYKjjAHinUxdQkxw3Ay1XcziXV86XY57aRqG5kGnJ8LFWmSjmAnUEnYh

International Economic Analysis:

  • Major Currency Economic Summaries
  • Performance of Major Imports and Exports
  • Mandates of Central Banks versus Expectations
  • Performance Indexes of Major Economies
  • Economically Correlated Currency Projections
  • Large Funds Currency Sentiment Readings
  • List of Technical Indicators to Look For
  • Occasional: Foregin Exchange Technicals Markups

American Markets Analysis:

  • Summaries of American Economic Structure
  • Performance of Major
  • Imports/Exports
  • Federal Reserve Mandate versus Expectations
  • Performance Indexes of U.S Economy
  • Economically Correlated U.S Dollar Projections
  • Large Trading Fund Index Sentiment Readings
  • Market Wide Earnings Versus Valuations
  • Fundamental Ranking of U.S Business Sectors
  • Best and Worst Future Consensus Estimates
  • Occasional: Firm Fundamental Strength Report
  • List of Technicals to Look for While Trading

Storefront

Investment and Finance, Serviced by Amazon

No Results Found

The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.

WealthCE FX + Equity Analysis

Major 8 Economic Summaries
Economic Performance Index
Currency Market Sentiment
Equity Index Market Sentiment
Sector Strength Tracking
Equity EPS/PEG Estimates
Fundamental Firm Analysis
Trend Following Trading Plans

Robinhood is a SEC, FINRA, & SIPC member brokerage that lets you to buy and sell U.S. stocks/ETFS with ZERO commission. Sign up and get a free stock!

coinbase

Coinbase is a digital brokerage specializing in currencies. They allow you to trade US Dollars and Euros for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.

coinbase

MyFxChoice is a regulated brokerage offering 200:1 Leverage on Foreign Exchange, Gold, and Silver. They offer 33:1 on Crude oils and up to 50:1 on equity indices like the FTSE100, DAX30, S&P500, and Nikkei.

Forex Tester 3 is a technical analysis back testing and simulated trading platform that serves as a testing platform for trading strategies.

Ledger Nano S - The secure hardware wallet

Sponsored Content