Calafia Beach Pundit: Update On Money Demand – April 20, 2019

April 20, 2019 Bob Weir Calafia Beach Pundit, Market Pundits

In this article, Mr. Grannis analyzes the demand and supply of money and concludes that, at the moment, the balance is stable.

The demand for money is a very important and under-appreciated macro variable. The Fed controls the supply of money, but the demand for money is a function of a variety of factors, some of which are beyond the Fed’s ability to control. The secret to any central bank’s ability to deliver low and stable inflation is to keep the supply and demand for money in balance, even though it is difficult to track the demand for money without the benefit of hindsight. Inflation is always and everywhere a monetary phenomenon; inflation results from an excess of money relative to the demand for it. It is that simple.

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Bob Weir has over 50 years of investment research and analytical experience in both the equity and fixed-income sectors, and in the commercial real estate industry. He joined eResearch in 2004 and was its President, CEO, and Managing Director, Research Services until December 2018. Prior to joining eResearch, Bob was at Dominion Bond Rating Service (DBRS).