Here is some evidence that I might be spectacularly wrong regarding inflation. I have thought inflation was very high due to probable increases in the money supply, but this looks like it is not the case at all. Since I am not a believer that rising prices from supply and demand are inflation per se, I may have been very wrong.
Well, isn’t there stagflation, rises in prices to due cuts in supply? Like during the 70’s.
Read the comments regarding measurements of the money supply. M2 apparently has increased a lot. Also, M1 is a small percentage of the actual money supply.
You’re right — it looks like the most important measure is M2. Some have discounted the importance of M3 (since it tracks M2 so closely typically), but after looking at it a bit, I still think it’s a mistake for them to stop reporting it. I guess they’d argue that we are just getting diminished returns to the cost of reporting financial information, and they used to have all kinds of crazy measures that are gone now, but M3 is going too far it seems.