Incoming Crisis? Global Money Supply Surges to Near $90 Trillion as Geopolitical Tensions Rise

The total Money supply in the United States, the Eurozone, Japan, and China has for the first time in history reached $89.7 trillion, having skyrocketed by a whopping $7.3 trillion over the past year.

According to the economics outlet Kobeissi Letter on the microblogging platform X (formerly known as Twitter), the rise in global money supply was the largest in three years and was similar to the jump seen in the initial pandemic response in the first half of 2020.

Per the outlet in the United States alone, the amount of money in circulation surged $410 billion year-over-yar to $21.2 trillion, which means that in the beginning of 2020, money supply in the country was 27% below its current levels.

BREAKING: Total money supply in the US, the Euro Area, Japan, and China has reached a new record of a MASSIVE $89.7 trillion.

Global money supply has skyrocketed by $7.3 trillion over the last year.

This marks the largest increase in 3 years and a similar jump to the initial… pic.twitter.com/A5KrGCjCc0

— The Kobeissi Letter (@KobeissiLetter) October 1, 2024

Kobeissi Letter concludes that “global money printing is back,” as central banks restart quantitative easing by purchasing securities in the open market in a bid to reduce interest rates and increase the supply of money.

According to Investopedia, quantitative easing also provides banks with more liquidity and encourages lending and investment, while adding to their reserves.

As CryptoGlobe reported, this year the price of gold has had one of its best year-to-date performances of this century as money supply has been steadily growing and as geopolitical tensions rise.

The precious metal is at the time of writing trading at $2,660 after rising around 1% in the last 24-hour period and around 30% so far this year. Its latest rise came after Iran fired around 180 ballistic missiles at Israel in what Iran’s Revolutionary Guard Corps said was a retaliation for the assassinations of Hamas’s political leader and an Iranian commander.

The M2 money supply, which includes physical currency in circulation, savings and time deposits, and money market funds, has been growing every month since February.

China’s commitment to significant monetary easing, coupled with the U.S. Federal Reserve’s aggressive 50 basis point rate cut, has also fueled market momentum, which recently suffered a setback in light of the escalating tensions in the Middle East.

Notably, Societe Generale has shifted 100% of its commodity allocation to gold, driven by geopolitical risks and a weakening broader commodity market.

The French bank increased its gold holdings to 7% of its total asset allocation, reflecting a 40% quarter-over-quarter rise. This pivot toward gold signals growing confidence in the yellow metal as a safe-haven asset amid ongoing uncertainties in global markets.

Featured Image via Pixabay.

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