The last snapshot of money supply is at the beginning of October 2022, but the trend is fairly obvious:
In particular, M2++ (the broadest form of money supply measurement) has gone from $4.392 trillion at the beginning of the year to $4.467 trillion on October 1, 2022. The growth is still positive but definitely shrinking – 1.7% for the first 9 months of the year. Indeed, the September 1 to October 1 snapshot showed a mild contraction.
This chart should not be surprising. The expansion of credit is reversing and the last time the country was really in this sort of situation from a monetary perspective was back in 1995.
1995 was an interest year from Canadian economic history. Perhaps refreshing one’s memory via a 2001 speech of the Government of the Bank of Canada at the time will assist.
This is going to make 2023 quite an interesting year.
Jean Chretien and Paul Martin don’t get enough credit in my opinion. Unfortunately this isn’t the same liberal party and I don’t see this current regime changing direction. Canadian dollar into the 60s in 2023? Yes, I see the irony in this.