Friday, December 31, 2010

Tonight's Money Supply Report

For the fifth week in a row, M2 has shown growth.  And the rate of growth continues to accelerate.

The preliminary December 20th measure stood at $8.834 trillion.  Annualized M2 growth over the past 13 weeks was 6.9% vs. annualized growth of 5.9% and 3.2% for the past 26 and 52 weeks.

These numbers are precisely what one would expect of an economy on the rebound.  Treasury bonds rebounded slightly from their recent, sharp sell-off, but they continue to offer little value at current levels given the prospects for corporate earnings growth and, unfortunately, future inflation.

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