Back to our doomsday scenario, well the last two weeks have been looking good, we are still down 20% on an annualized basis but that is much better than what we saw before. We are also tracking M2 which given what the Fed did last week and the other pumping of the economy we would expect a substantial change (We have links to this and all of our other stats in the Telmarc Links location). This is shown below.
However we show below the annualized rate of increase of M2. We also plot the 60 day moving average.
For the last six months the M2 has been growing on a running average between 15% and 20% per annum. This is exclusive of the inclusion of the Feds recent actions since it is current until 9 March 2009. We anticipate that this may be the canary in the mine shaft and the only thing holding back a massive inflation tide if unemployment. If the Administration's plan works, that is stimulates employment and savings then this would be expected to expand dramatically and induce significant inflation.
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