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.

2 comments:

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.