SCHQ - Why M1 Money Supply (Cash) Is Skyrocketing Like No Time In History

• M1 money supply (the most liquid forms of cash - bills, checks and basic savings accounts) had grown faster than any time in history.
• This could be due to Biden's promised termination of the special capital gains tax rate that is lower than tax on regular income. So, the rich are scrambling to convert their assets.
• Another theory suggests money is moving from term savings to checking accounts, making for a rapid rise in cash. Uncertainty about whether forbearance will be extended into 2021 may have some people cashing out any longer-term deposits they were retaining for security in such uncertain times in order to pay their back payments on mortgages and rent.
• If it continues to be held in M1 cash form, then, being easier to spend and move down the road, it could create the kind of inflation I warned about where there is too much (cash) money chasing too few goods during a time of COVID-19 shortages. It is a matter of how the cash circulates.

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