Stock Investors Beware: U.S. Money Supply Shrinks to Great Depression Levels

The decline in the U.S. money supply, specifically M2 money supply, which includes savings accounts, money market funds, and certificates of deposit, is raising concerns on Wall Street. This decline, along with other money-based economic indicators such as commercial bank credit tightening and banks hesitating to provide loans, suggests the possibility of a U.S. recession. Historically, significant declines in money supply have been associated with deflationary recessions. While the stock market's performance is dependent on the investment time frame, the decline in money supply and other worrisome money metrics indicate potential risks for investors. However, history has shown that the stock market eventually recovers and reaches new highs, emphasizing the importance of patience in wealth creation.