The stock markets are near all-time highs, unemployment is falling steadily, the GDP is growing at a nice clip. Who would guess amidst such excellent signals that the US is going through a monetary contraction? But that is exactly what the graph below shows.

The YoY growth rate of Corrected Money Supply (CMS) has fallen from 20.2% in February 2014 to 8.4% in December 2014. By the end of 2015 the growth rate will be firmly in negative territory if it continues to fall at the current rate. And that is when nasty things can be expected to happen. The Fed could of course accelerate matters if it decides to raise interest rates.

Overall the economy is following roughly the same trajectory as before the 2008 crash. This time I suspect the end will be much nastier.