SPIP - The Problem With Unwanted Money

• The demand for money - as measured by the ratio of M2 to nominal GDP - currently stands very near to an all-time, eye-popping high.
• Compared to the levels which prevailed 2 years ago at this time of year, air traffic is now down only 40%, whereas at the lows of last April, air traffic had plunged by an astounding 96%.
• Note that most of the increase in inflation expectations of late has come from a rise in nominal Treasury yields.
• The yield curve has steepened noticeably since last summer, mainly due to rising long-term yields, which in turn have been driven by expectations that the economy will improve enough to allow the Fed to raise short-term rates in the future.

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