Tuesday, August 3, 2021

M5 as of July 31 2021

M5 is my measure of money that includes M2, plus debt held by the public, less Treasuries owned by the Fed. Here is the current measure:

As of 7/31/21:

M2 (as of 6/1/21):  20,388.9

Public Debt (as of 7/30/21):  22,427.7

Fed Held (as of 7/28/21): -5,263.7

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Total: 37,552.9

On 6/30/21, this was at 37,516.5 and on 9/30/20 it was at 35,296.8.  For July, this was up only 36.4.  For the fiscal year to date, this is up 2,256.10 or 7.67% on an annualized basis.  I am arbitrarily putting the danger zone at 8% increase or about $250 billion/mo, so this barely squeaks by as being sustainable.

There are two important numbers I am ignoring in this calculation.  First, the cash balance of the Treasury at the Fed.  This is about $537 billion as of 7/31/21.  Also, the amount of reverse repos with the Fed.  This number was about $902 billion at month end.

The debt limit came back to life at month end, and now stands at about $28.5 trillion.  It will remain there until raised by Congress, which will probably happen around October 1, when then new fiscal year begins.  There could be a government shutdown starting on October 1, unless Congress can agree on a budget and new debt limit.

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