The European Central Bank (ECB) has updated its monetary aggregrate data for September and it makes interesting reading after the Greek bailout package announced yesterday.
As Delusional Economics forewarned in September, the narrow M1 money supply trend remains extremely weak:
Although there has been a minute uptick in M1, M3 has also picked up, but as Delusional Economics explained about the impact of the broader M3 money supply:
(M3) tends to be a trailing indicator. Narrow money, M1, has been a much better economic leading indicator historically; it contracted in real terms ahead of the last recession, while M3 was still growing solidly at that time.
The base case remains, the money supply remains in barely expanding territory (and is negative in real terms) whilst credit growth remains at near historic lows (and contracted in nominal terms for the month).