For another post in the works, I want to say "circulating money is smaller than GDP, and growing more slowly". But I have to stop and check the "growing more slowly" part.
What I love about FRED.
|Graph #1: FRED 1bzh|
Circulating money is less than GDP, and the ratio remained on the low side from the 1970s to the crisis.
But something else catches my eye. Before the 1982 recession, it's clearly downtrend. Since the crisis, it's clearly uptrend. But from 1981 to oh, 2008, there is a definite uptrend infused with a business cycle-like pattern of ups and downs. Up during recovery, then down to recession.
I don't usually look at M1ADJ, circulating money "adjusted for retail sweeps". I'm trying to use it more often because I think it's more accurate than M1SL. With M1SL you'd want to argue the trend runs downhill to the crisis. I'm pretty sure now, that that's wrong.
But it's the regular, business cycle-like pattern that fascinates me, on the graph above.