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According to: Briefing.com
"May M2 money supply showed the strongest monthly growth since the Fed loaded
the system with liquidity just following the 9/11 attacks. M2 jumped at
a 19% annual rate. The textbook effect of strong money growth is a resulting
push higher on inflation -- the more there is, the less the value. The
textbook hasn't provided much of a read in recent years as money growth has
been booming and disinflation continuing. "
Does M2 not count for much now ? Have bonds gone too far ? or is there such
a supply imbalance - demand for bonds outweigh supply eg: Bond curve duration
particulary in Australia continues to lengthen as short bonds mature - yet
all the bond fund managers here are short to the index. Govt has reduced
bond issuance over the years.Also Asset allocation in terms of superannuation
is generally long equities rather than bonds.
I would be interested in your comments.
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