Lets discuss the new money supply entering the market, why M1 has seen such a big increase, and what this means for you – Enjoy! Add me on Instagram: GPStephan
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How this works:
First, we have the M0 Money Supply – This is PHYSICAL Cash Money that you have in your pocket, or the money Iโm holding in my hand, or the money sitting in a bank vault.
Second, we have the M1 Money Supply – This represents a combination of money in checking accounts, and all physical cash mentioned in M0. This is money in checking accounts that could basically be converted to cash, or spent, at a moments notice.
After that, we have M2โฆthis includes money sitting in savings accounts, money market funds, and other accounts that people hold on to with less than $100,000, but donโt use for day-to-day spending. This ALSO includes all of M1
And finally, we have M3โฆthis covers investment accounts, retirement accounts, and other โlong term holdingsโ that you wouldnโt necessarily spend instantly, but – you COULD get access to money if you needed to. And just like the others, M2 also includes all of M2.
First, there was a big shift of money moved from Savings Accounts and into Cash and Checking Accountsโฆor, to put it more appropriatelyโฆthere was a big influx of M2 money supply moving into M1, where it could be more easily spent. The thinking is that this is AROUND the time where many mortgage forbearance plans were expiring, we werenโt sure if rental protections would be extended beyond December 31st, and end of year financial obligations may have caused a big move into the M1 Money Supply.
Second, this MIGHT have something to do with proposed tax plans on long term capital gains for those earning over $1 million per year. There have been quite a few proposals for an increase in tax rates and transfers, and because of that – many wealthy people have shown interest in locking in their profits, or cashing out by the end of the year to avoid a potentially HIGHER tax in the future.
Third, as people save more money and refuse to spend it – more money is going to end up in savings and cash, further inflating this amount you see here.
Or, in other words – OVERALL, YES – more money was introduced through the Trillion Dollar Cares Act, people had to save because there were fewer places to spend their money, low interest rates promoted more borrowing so people could have access to more money, the velocity of money dropped because that money wasnโt spent, and because of that – there was a large influx of money into SAVINGS AND CHECKING ACCOUNTS than weโve seen during any other time in history. Thatโs why the money supply saw a HUGE initial increase.
Regardless, though – YESโฆa LOT of more money IS in circulationโฆa LOT of that was because people have fewer places to spend it, so they keep it in their accountsโฆand, until thereโs sufficient demand – thereโs not much concern for inflation. In the future, that might be a different story as stock and real estate prices continue to go upโฆbut, at least now you know more about it, and how the supply of money affects you and your wallet.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.
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Nice video! I was able to build a big income stream during the covid 19 pandemic investing with a professional broker, Mrs Victoria Valle.
That is such a sick drum set
I always hated that guy who buys a newspaper and puts it on the credit card or buys a small coffee and uses his card and holds up the line. I get using a credit card but i always have cash for smaller things plus when a man buys a meal or takes his girl out its more manly to pay in cash.
What do I do with money?
Are you at all surprised by the amount of followers you have? It is good content and based on your delivery I assume you have a bit of a younger audience, so it is great that there is so much interest in what youโre talking about.
Thanks for being the high school teacher we all should have had!
Because it decrease the value
Bitcoin and forex are more profitable with the favorable market rise
Whats up grahams, its guys here
Inflation is the increase in the currency supply. Higher prices are a symptom of inflation. Itโs like a cough is the symptom of a cold. By then, you e already got it.
We learned about the M1, M2, and M3 money supplies in econ in high school! Stay in school kids.
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cool video
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I just walk
l recommended a professional broker to you guys sometime ago, can I get person who invested with her
comment below
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Bitcoin
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What's up Graham, it's guys here! ๐
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That 10 to one than another turns to zero because of taxes
There are some arguments for holding more cash at the moment. The stock market could go way down. If you are holding cash, you have something to live on until the market recovers somewhat.
Holding cash for stability isn't as costly when interest rates are this low (there are few alternatives). If you are retired or nearing retirement you might want more in cash. If the market declines you can buy more stocks at a lower price but only if you have some cash.
You can sell stocks but you will pay taxes or you can hold on to most stocks and sell just a few and hold that as cash.
I just nuked the like button
I think fresh water, Helium and crude oil are very good trading cards of the future! I know I'm old, but nobody trades baseball cards like people in the 60s that put baseball cards in their bicycle spokes to make noise!๐ค๐
That's why you get a little gold and silver
I ALWAYS hold cash…………until I see something I really like or want.
Thanks for this great video it has been helpful to us. Life could be easier if we meet the right people, I have made huge profit by investing with a professional broker Mrs Kramer Rosalina and now am growing financially.
cus printer go brrr?
Why did you ever start holding any cash you dont need for bills, food etc..?
Question: The number of businesses taking bitcoin is growing. There are several gold based credit/debit cards. What affect does the movement to gold and bitcoin for daily purchases affect the dollar?
Inflation IS happening, at an alarming rate. Asset inflation. You even admit it at the end of the video, hugely disappointing that you completely ignore this fact in the video
Intro ๐
what's considered a high interest saving account? I mean what account doesn't pay in pennies in these days.
I donโt believe in a cashless society, but cryptocurrency coexisting with cash solves this problem.
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Getting rid of that M0 is one of the easiest changes to make. While keeping cash is a great way to not overspend, investing that money can go a long way.
he doesn't know the difference between money and currency
Review my channel! @Dylan365 I posted a video every single day for a full year. Rip apart or promote as you wish I respect your insight!
Iโm going to regurgitate this to my co workers so they think Iโm a genius ๐๐๐
whats up graham, its guys here?