Monetary Base Contracts for 9th Month

(Negative) In November 2016, the monetary base was $3.652 trillion. Compared with one year ago, the monetary base decreased 9.4 percent, which was somewhat slower than last month but still very fast historically. This was the 11th time in 12 months and 15th time in the last 18 months that it has contracted. As a result, the annual rate of change in the monetary base, now -4.9 percent, contracted at an accelerating rate for the ninth month in a row. The last time the annual rate of change contracted faster was May 1938. This was during the second leg down of the Great Depression. So, perhaps this is an indication that we are entering the second, and hopefully final, leg down in the Great Recession. It is likely that this will cause some surprising shifts in economic data.