Quote Originally Posted by DTC View Post
The Federal reserve and other central banks/ governments print money (sic.). And inflation generally keeps up. But it hasn’t since the mid-90’s:
https://www.longtermtrends.net/m2-mo...-vs-inflation/

And if money supply keeps exceeding inflation, you’d expect inflation to eventually appear and knock back the sharemarket, but it took 20+ years, during which the sharemarket’s come through pretty well. So if your strategy was to time the market on the excess money supply signal, you’d have lost out on a lot of gains.

But if absolute money supply is shrinking (not just a reduction in the rate of printing, but an absolute reduction in the amount of money in the economy):
https://tradingeconomics.com/united-...oney-supply-m2

does this mean the Federal reserve shreds money also?
The charts are just that and it's based on how you interpret the inflation over which time period. M2 has not decreased over the past 1+ year. Only a fool considers inflation as the result of a 2 or 3 months period. Look again in 2021 vs how much the M2 supply has grown to now. The end result without a doubt has been inflation. The second chart shows the M2 growth rates. Too late, the cat is out of the bag once the $ has been printed, the cat is out of the bag and inflated is the end result. As my macro-econ prof at uni explained, there's always a delay on the aggregate spending and the time inflation is realized. The central banks adjust interest rates by means to control M2 but it's kinda like a moving target and control is is much like a using a wobbly steering wheel. Look at that peak of M2 during the 2020 Covid year. That's the result of gov't spending world wide trying to control deflation. When they overspend or print, then inflation is the end result which always occur later on. This scenario has been explained by Warren Buffet during the GFC where he said massive spending much occur in order to control deflation. He also said the prescription also comes at a cost... called 'inflation'.