Is M2 Secretly Growing Again?!

After U.S. M2 money supply year-over-year growth hit a record 26.92% in February 2021, the Federal Reserve decided that the public no longer deserved access to this data in a timely manner. On February 23, 2021, the Fed began to publish its H.6 statistical release at a monthly frequency containing only the monthly average data needed to construct the monetary aggregates. Prior to February 2021, the data had been released by the Fed on a weekly basis for nearly half a century.

As we discussed in our 2022 NIA Gold Educational Report, the #1 most important long-term indicator for determining the price of gold in U.S. Dollars is U.S. M2 money supply per capita. When NIA published its report five months ago on May 22nd, it had no way of knowing that U.S. M2 money supply per capita had totally stopped growing in March 2022. On May 22nd, the latest M2 data published by the Fed was already two months old. We knew that U.S. M2 money supply per capita averaged $65,676 in March 2022, and we knew that April is historically the largest month of M2 money supply growth. Therefore, we decided to use long-term seasonal growth percentages to estimate U.S. M2 money supply per capita on May 22nd of $66,234. This was wrong!

In reality, U.S. M2 money supply per capita peaked in March at $65,676. By May 2022, it had fallen to $64,859 or 2.1% less than we estimated. As of August 2022 (using the latest two-month-old data), it remains at only $64,904, which is below its December 2021 level of $65,119.

The fact that U.S. M2 money supply per capita peaked in March explains why gold temporarily ran out of steam that month.

In all likelihood, we will find out one month from now that U.S. M2 money supply per capita began to grow once again in late-October 2022 (right now).