On March 31, I published a post titled, 'M2 money supply at minus 7.9? Not in my lifetime!' in which I shared incredibly important information about the ever shrinking money supply after reading a great article on KingWorldNews.com that was full of up to date information that I thought was relevant to share with my followers and visitors on PublishOx. In fact, i now see that it was so up to date that, thanks to KingWorldNews, I'm about two weeks ahead of the crowd. I knew that soon, this story would move to the 'front page'.
This morning, after catching another article on the same issue, this time on Zero Hedge titled, 'Recession risk grows as M2 money supply shrinks at fastest pace since Great Depression', I now see that indeed this story is moving to front and center. In my previous article, I mentioned that we were facing a credit crunch not seen in at least 60 years. This Zero Hedge article goes even further to suggest we've not seen money supply contraction like this in at least 90 years!
Oddly, when I first reported on it, my post barely got noticed. I got just over 100 hits in two weeks when I'll usually get 500 or more in the first 24 hours, which for little ol' me is actually quite good. I had expected that article to get lots of attention and was surprised that it 'bombed' the way it did compared to my other posts.
I hope this post does a tad better because we're facing a situation we have not seen before in our lifetimes. M2 money supply contraction is a huge recession indicator but to have such a historic drop in M2 money supply suggests something far more ominous is on the way. Keep in mind, we're talking about U.S. money supply, although it appears it's not just the U.S.A. in contraction mode as the Zero Hedge article suggests Europe and Canada are in the same boat.
This article also states that M2 money supply contracted for the third straight month, as of February. It's now April and the money contraction continues as banks aren't lending as much which is exacerbating the issue. On top of that, just as there is a rate hike 'lag effect' of 6 to 18 months, the same is true for money contraction.
So if it's reported that February was the third month of consecutive contractions, then it's safe to say we are in the fifth month (April) of money supply contraction. So does this mean we'll start feeling the pinch of this contraction in June and onward for at least another full year?
Since we're on the topic of lag effects, we've already started feeling the pinch of rates hikes from a year ago starting in April. Actually, it was Canada's central bank that led the charge by firing the first rate hike salvo the previous month in March. Exactly one year later, we've seen sudden bank failures in California, New York and Switzerland. I believe this is what prompted the BoC to pause on hiking rates for the second session in a row this month. They know more pain is coming. Next month, all eyes are on the FED as they are caught between a rock and a hard place. Raise rates, kill the economy. Lower rates, kill the dollar. In fact, the dollar is down 10% since last September's high of 114, even with all the rate hikes. It now sits just below 102.
Now, I'm seeing the rate hike and money supply contraction 'double lag effect' converging in June as we begin to feel both the effects of money supply contraction and high interest rates. This SCREAMS recession but how bad will it get? Well, I'm old enough to remember that every recession since 1980 was billed as 'the worst recession since WWII'. Each recession that I've lived through was worse than the last. So are we facing a recession worse than all the previous recessions since WWII? I'm afraid so.
Alas, there is something else that is coming in June. The debt ceiling issue in the U.S.A. has still not been resolved and June 5 is the deadline to figure something out. If the debt ceiling is not raised to create more liquidity, then it's likely the U.S.A. will be forced to undergo austerity measures, a.k.a. massive cutbacks in government spending. It might even bring an end to the Ukraine War because most of the funding has been coming from the U.S. government.
Yes, I see a big mess coming in June but it might come earlier. We might starting seeing this unwind next month or basically, in a few weeks time. The best thing to do is not panic. We've survived recessions and depressions before. By studying how people managed to get by in previous recessions, this will help guide you to avoid the pitfalls that come with them.
May I suggest to stock up on canned / dry goods and fresh water bottles. If you need to get your car fixed, do it now. Got a hole in your roof, get the shingles now. Got a gas can? fill it up and set it aside for later use. Think of anything you might need and go buy it now. Is it a tooth brush? Is it bleach for the laundry? It all becomes ultra valuable when the stores are all empty and in case you haven't noticed, some big name grocery chains are closing stores in many major cities because of rampant crime.
One of the most important things you should stock up on is SEEDS. I've seen the price of seeds double, triple over in the last few years. Seeds can sit for years in the proper environment. Build up a variety of seeds for your collection. Learn to grow / propagate plants. Some plants can be better propagated through clippings. As an example, I started out with 5 chamomile plants two summers ago. Now I have 14 of them, just by clipping some branches and re-planting them. This number will likely double by next fall. The chamomile buds make for a great cup of tea.
All the info you need is at your fingertips. A lot of people are going to get burned because they're not paying attention to what's really going on but it doesn't have to be that way for you and me. The way I see it, a giant wave is coming, a Tsunami if you will. I'm the surfer out on the water paddling towards the wave, ready to take it head on and ride this wave just like the pros do.
When the double lag effects from the M2 Money supply contraction and rate hikes hits around the month of June and joins in a 'triple convergence' with the still unresolved debt ceiling issue, it could actually spell the end of the U.S. dollar as we know it. If it gets to that, it will be the end of every currency around the world as we know them.
Hold on to your paddle board because we're already in the water. Most of us have never surfed before and we're going to have to learn to surf and fast! The great news? Surfing rocks!
On another note, silver is holding well today and is still up 25% since its March 10 low. I believe that silver is the 'sleeper' bargain of the century. Better to get it years / months / weeks early than to be just one second too late!
Peace and love to everyone.
P.S. Need silver? I've just added 10 brand new 2023 Royal Canadian Mint Silver Maples available for sale with low, low ship costs on on Ebay. Show your support by buying an ounce of real silver. Send me a quick note letting me know you saw this post on PublishOx (or Substack) and get 20% off already low ship fee of just $5 within Canada and just $6 to USA. Once they're gone, they're gone. Click the image below to view the listing. I have other silver bars and coins listed so be sure to browse my other listings as well and add me as a favorite. Thank you for your support!
New 2023 RCM Silver Maple - The last Maple to feature Queen Elizabeth II.
I'm now also on Substack where I will soon begin new podcasts as well as post extra material.
Previous Posts:
Liquidity Crunch! M2 money supply at minus 7.9
Silver correction - I knew this would happen!
USD Index down 10% in 6 months.
Silver continues to edge higher. Asleep no more?
The French are really pissed right about now.
Silver posts 25% gain since March 10 low.
Gold back above $2,000. Singapore adds 6.8 tonnes.
2 week waiting time for new Silver Maples.
Ronald Stoeferle: It took more than 10 years to tame 1970s inflation.
These sponsor links help support my blog. Thank you!
Earn free Bitcoin using CryptoTab Browser.
Purchase any precious metal at OwnX.
Secure your crypto and get $10 in Bitcoin - Ledger Nano X
Support free speech - join Rumble today.
Earn TFuel watching livestreams on Theta tv
Bitify - Buy and Sell Bitcoin marketplace
Videvo - Professional Quality Videos
