Growth of Global Money Supply

I came across an interesting post by Mike Hewitt in which he’s looking at global money supply. Clearly the printing presses are in full force, all over the world.

Recently we’ve seen a dip in global money supply, but that might have more to do with the strength of the U.S. dollar than anything else:

Due to the rapid appreciation of the US dollar near the end of 2008, there has been a recent decline in the value of the global money supply, as seen on the extreme right-hand side of the chart. It should be noted that while the value of the money in the latter half of 2008 may have declined, the volume of virtually every currency increased.

This recent strengthening of the US dollar and subsequent decline in the value of the global money supply is the result of a sharp demand for the currency caused by large portfolio-holders selling assets en mass in response to a global financial collapse. The author speculates that this ‘flight to the dollar’ will not last very long and that its value will fall as rapidly as it rose.