The Physics of Money

Part 1: Current Data

The charts below show current Federal Reserve and Treasury data. We update these regularly to provide context for investors evaluating precious metals.

Money Supply (M2)

Since 2020, the US money supply has grown significantly. The chart below shows the M2 money supply, which includes cash, checking deposits, and easily convertible near-money.

The Fed's Balance Sheet

The Federal Reserve holds over $7 trillion in assets. This chart shows the total assets on the Fed's balance sheet over time.

Deficit and Debt-to-GDP

The debt-to-GDP ratio has increased in recent years. This is a metric that many economists monitor when evaluating fiscal sustainability.

Part 2: Debt and Growth Trends

The relationship between debt growth and economic growth is something economists closely monitor. The chart below compares these two metrics.

Commercial Real Estate

Commercial real estate delinquency rates are one indicator of stress in the banking sector.

Margin debt levels are another metric that investors monitor for signs of speculative activity.

Market conditions can change rapidly. Many investors hold precious metals as part of a diversified portfolio.

Part 3: Monetary Policy Considerations

The relationship between fiscal policy and monetary policy is a topic of ongoing discussion among economists.

Interest Rates and Debt Service

The chart below shows the relationship between interest rates and government interest payments.

• Higher rates increase debt service costs for the government.
• Lower rates tend to support asset prices and reduce borrowing costs.

Treasury Market Liquidity

The reverse repo facility shows how much liquidity is parked at the Federal Reserve by money market funds and other institutions.

Factors Economists Monitor

Here are some factors that analysts consider when evaluating economic conditions:

• Treasury Auctions: Demand for US government debt at various maturities.
• Credit Markets: Conditions in short-term lending markets.
• Inflation Data: How price changes affect consumer purchasing power.

Many investors use this type of data when making portfolio allocation decisions.