The First chart is a chart of M2 is a means to quantify the amount of money in circulation. It includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.
It is seemingly inflationary at first blush.
However, another important measure of money is M2V, or the velocity of money and it measures the turnover of money (or how much money in circulation is used for purchasing goods) This is a chart you don't hear about a lot. The reason we haven't seen evidence of hyperinflation is because of this chart.
The reason I am posting this is to elucidate the quixotic paradigm the FED is currently transfixed in. In terms of credit and money the Fed has an infinite supply of influence, they can provide as much as they want ad infinitum (by printing money.) However, the key word in the last sentence is supply. They can provide the supply (chart 1) but they can't control the demand of money/credit (chart 2 or the velocity of money)
And this is the quandary the Fed finds itself in. They print, print, print but without the velocity of money up-ticking it's like spinning your tires in the sand. The thing that concerns me is that the FED has largely been creating inflation by keeping interests rates low. It is printing money to buy USTs to create artificially low rates. That concerns me because the bond market is currently focused on the failing edifice that is the European Union. When the bond market turns it's sights on the US, I think we could see a massive flight out of USTs and into commodities. I think we have some time before that happens because everyone is focused on Europe right now, and the US is the roundest turd in the bowl so it looks the most appealing.
It will be interesting watching the M2v chart going forward.