U.S. Money Supply Is Shrinking the Most Since the Great Depression. Is an Economic and Stock Market Meltdown on the Way?
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The U.S. money supply is shrinking at the highest rate since the Great Depression. Historically, whenever the money supply has contracted by at least 2%, it has been followed by a depression and double-digit unemployment rates. However, the current decline of nearly 4% in M2 money supply is not expected to lead to an economic and stock market meltdown. M2 money supply has stabilized in recent months, and the decline may not have the same impact as in the past due to decreased reliance on cash and increased use of digital payment methods. Some economists even believe that the declining M2 level could help bring inflation down and potentially avoid a recession. Overall, while the shrinking money supply is a concerning indicator, it is not necessarily a sign of an imminent economic crisis.

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