Recent indicators suggest a potential shift as M2 money supply contracts sharply. While inflation has been the norm in recent years, notable declines in asset prices, such as a 25% drop in used car prices and a 50% decrease in egg prices in 2023, raise questions about deflation risks. Examining historical patterns, instances of deflation followed significant inflation spikes. Corn and wheat prices, key components of global calorie intake, have experienced substantial drops, influencing inflation dynamics. The current 3% inflation rate is sustained by gradual changes in service prices, particularly in medical care, education, and transportation. The economic landscape appears poised at a crossroads.
M2 money supply is contracting sharply
Is the US economy heading for deflation?
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