My favourite economics metric -- what I call Corrected Money Supply Growth (CMS) -- has fallen below the 0% mark. This has never augured well for the US economy and, since what happens in the US affects the rest of us, for the world economy.

The last time CMS growth turned negative was during the Covid pandemic. But large infusions of cash into the wallets of American consumers meant that the US economy not only did not go into recession except briefly, but emerged better than before the pandemic.

CMS growth has been negative since August 2023. My impression is that we are seeing a replay of the Reagan years. Monetary policy is tight but fiscal policy is loose, mainly in the form of large military expenditures. The first effect will probably be rising inflation with a recession following later.