Shadow stats has it right, the conversion of time deposits to demand deposits:
“inflation pressures continued surface, with the May 2023 Money Supply reflecting still-extreme flight to liquidity. The most-liquid “Basic M1” (Currency-plus-Demand Deposits) held 119.2% above its Pre-Pandemic Level and was increasing year-to-year with intensifying inflation pressure"
The G.6 Debit and Deposit Turnover release was discontinued for spurious reasons. The boom/bust in real-estate would stand out like a sore thumb.
To wit:
The G.6 release fell to President Bill Clinton’s “Paperwork Reduction Act of 1995”: From the Federal Register: “The usefulness of the FR 2573 data in understanding the behavior of the monetary aggregates has diminished in recent years as the distinction between transaction accounts and savings accounts has become increasingly blurred (And that’s also what Chairman Alan Greenspan said about M1). Further, the emphasis on monetary aggregates as policy targets has decreased. In addition, respondent participation has declined over the last several years. For these reasons, the Federal Reserve proposes to discontinue the survey and the related statistical release.”
Link: https://www.frbsf.org/economic-research/publications/economic-letter/2023/may/rise-and-fall-of-pandemic-excess-savings/
The conversion of time deposits, gated deposits, to demand deposits should slow the velocity of money by the 4th qtr. of 2023.
“aggregate excess savings would likely continue to support household spending at least into the fourth quarter of 2023.”
Y-o-y comparisons aren't valid measures.
And income velocity is a contrivance. You see Milton Friedman was "one dimensionally" confused:
re: ” as income velocity that cannot but impress anyone who works extensively with monetary data” (Friedman, 1956, p. 21).
George Gavey was right.
Shadow stats has it right, the conversion of time deposits to demand deposits:
“inflation pressures continued surface, with the May 2023 Money Supply reflecting still-extreme flight to liquidity. The most-liquid “Basic M1” (Currency-plus-Demand Deposits) held 119.2% above its Pre-Pandemic Level and was increasing year-to-year with intensifying inflation pressure"
I show this time-series to demonstrate money flows, the volume and velocity of money:
https://monetaryflows.blogspot.com/2010/07/monetary-flows-mvt-1921-1950.html
The G.6 Debit and Deposit Turnover release was discontinued for spurious reasons. The boom/bust in real-estate would stand out like a sore thumb.
To wit:
The G.6 release fell to President Bill Clinton’s “Paperwork Reduction Act of 1995”: From the Federal Register: “The usefulness of the FR 2573 data in understanding the behavior of the monetary aggregates has diminished in recent years as the distinction between transaction accounts and savings accounts has become increasingly blurred (And that’s also what Chairman Alan Greenspan said about M1). Further, the emphasis on monetary aggregates as policy targets has decreased. In addition, respondent participation has declined over the last several years. For these reasons, the Federal Reserve proposes to discontinue the survey and the related statistical release.”
See: “Quantity leads and velocity follows” Cit. Dying of Money -By Jens O. Parson
No money stock figure standing alone is an adequate as a guidepost for monetary policy.
see Analysis of bank debits as a business cycle indicator (richmond.edu)
see Member Bank Reserve Requirements: Analysis of Committee Proposal, Box 107 (stlouisfed.org)
If you look at the G.6 release you’ll know monies impact on prices:
https://fraser.stlouisfed.org/files/docs/releases/g6comm/g6_19961023.pdf