After an exceptional monetary expansion in 2020, we are surely seeing this. I noted the possibility in May that year. Tim Congdon, a well-known monetarist, had argued this before me. According to the Center for Financial Stability, “Divisia M4” (an index that weights the components by their role in transactions) grew by 30 per cent in the year to July 2020, almost three times as fast as in any similar period since 1967. No such thing happened after the 2008 financial crisis. Many then worried over the expansion of the monetary base. But that did not matter because it did not affect broader aggregates. (See charts.)
