Monthly Archives: August 2014

The Dutch Money Supply Has Been Declining For 2 Years

The money supply is the total amount of monetary assets available in an economy at a specific time. There are different ways to calculate the amount of money in an economy and M3 is the most broad definition. This is important because there is strong empirical evidence of a direct relation between money supply growth and long-term price inflation, at least for rapid increases in the amount of money in the economy.

The interesting thing is that the amount of money in the Dutch economy has been declining for over 2 years now. I guess it has to do with people using their savings to pay down debt on their mortgages and other types of loans.

Not surprisingly inflation in the Netherlands is low. Last June it was only 0.9% according to CBS.

M3 Netherlands Total Amount in Euro's

M3 Netherlands Total Amount in Euro’s

M3 Netherlands Year over Year Change

M3 Netherlands Year over Year Change