Tuesday, December 10, 2013

Total Debt (Credit Market Instruments) Vs Money Supply

Chart of total credit market instruments (i.e. total debt) versus M2 money supply [link].

Here's what the ratio looks like. Here's what the ratio of total debt to M1 money looks like.


Anonymous said...

It would be really good to look at global data (to see the effects of so many QE monetary policies -- in the US, UK, EU, JPN, etc.).

The ratio charts do show a sharp "de-leveraging" in the US, which (if you dig into data) is mostly sophisticated investors winding down SPV/SPEs and the like.

A question worth asking is: why are credit market instruments growing in a de-leveraging environment?

CP said...

Feel free to do the analysis, and I'll post it.

And thanks for engaging with the post.