The Real Rate of Inflation? Follow the M2 Money Supply

Most people look to the Consumer Price Index (CPI) for inflation data—but that doesn't always tell the whole story. The real rate of inflation may be better reflected in the growth of the M2 money supply.

M2 includes cash, checking deposits, and easily convertible near money. When the government and Federal Reserve inject large amounts of money into the economy (as we saw in 2020–2021), the supply of dollars increases—but the amount of goods and services doesn’t rise as fast. That’s basic supply and demand: more dollars chasing the same amount of goods means prices go up.

So while CPI might show "moderate" inflation, if M2 is expanding rapidly, the true decline in your dollar’s purchasing power is likely much higher.

Watch the money supply—not just the price index—if you want the real picture. #Bitcoin