Another Day, Another Money Issue

You are on Reddit, enjoying your pricey iced coffee, when you see a topic where economics nerds are arguing over the M2 money supply and the stock market. “What’s M2 money supply?” you ask. “Isn’t that a robot from Star Wars?” No, regrettably. It’s just money going around and some savings. No, it doesn’t mean you get any of it. But I believe it’s pretty important because the economy is the reason we can’t buy concert tickets anymore.

The stock market is acting like it always does: it goes up when you believe it’s going to fall and down when you put your sad 401k money into it. Hey kids, welcome to the end of capitalism.

What does the M2 money supply mean? (And why does it sound like a Pokémon?)

Okay, put on your dorky glasses. The M2 money supply is all the money people have that they use to pretend they’re doing well financially.

• Cash (also known as your “emergency $20 for Chick-fil-A”)
• Checking accounts (spoiler: they’re always half-full)
• Savings accounts (what savings? Haha)
• Some CDs that only older people still talk about.

The thing that makes it worse is that inflation goes up when M2 goes up. So, the Fed conjures up money, and all of a sudden, your groceries from Aldi cost more than your therapy session. Serious economists would connect this directly to how the market works, but most people think it’s why Starbucks raised the price of cold brew to $8. That’s when you know the world is coming to an end.

The Stock Market: A Graphical Panic Room for Everyone

The stock market is like a huge group therapy session for Americans, except it costs money and instead of getting help, you get judgment from Wall Street lads who think “diamond hands” is a way to improve as a person.

As soon as M2 goes up, the stock market goes berserk, like a cat seeing a cucumber. When inflation says “boo,” investors get nervous, and all of a sudden your retirement portfolio looks like a sad pie chart with the crust missing.

And every financial influencer on TikTok says:

• Option A: “Buy the dip!”
• Option B: “The dip is the friend we met on the way.”
• Option C: “To be honest, just give up and start an Etsy store.”

Stocks are merely emotions. We go down when people think the economy is weak. What if Uncle Jerome at the Fed conducts a press conference and seems a little stressed? Boom! There are red candles everywhere.

Inflation Nation: Why Your $5 Footlong Costs $11 Now

Let’s talk about this: as M2 goes up, your dollars go down faster than your energy on a Monday morning Zoom call.

For instance:
In 2020, M2 went utterly insane as stimulus checks rained from the sky like Oprah on turbo mode: “You get free money, you get free money!”

Investors are putting money into Robinhood, teens on TikTok are talking about meme stocks, and Gamestop is being… important?

Prices are going up, eggs are suddenly a luxury commodity, and all of a sudden you’re not sure if you still need Spotify Premium.

Link? When people spend more money on the same products, prices go up. And the stock market is the same way; it goes up and down like a raccoon on drugs.

Reddit Economists Are Having a Great Time

If you have the guts to look up “stock market vs M2 money supply” on Reddit, be ready. The comments are like a show:

• The first person said, “M2 velocity is much more important than volume.” (What is velocity, dude? Are we racing Tesla stock now?)
• The second guy said, “This means the dollar is going to fall soon, so buy gold.” (Okay, Mr. Apocalypse Prepper.)
• The third guy added, “Just DCA into VTI and relax.” (Three-letter acronyms are supposed to help with anxiety, right?)

The truth is that regular folks read these pieces, nod like they get it, and then Google “Does an increase in the M2 money supply mean I can finally buy a house?”

Spoiler: No, not at all.

What should you truly care about? (Trick Question)

Want to hear the hard truth? Not this one either. No matter what happens with M2 or the stock market, your income is still behaving like rent money, and your “budgeting app” is merely a diary for your sentiments right now.

But if you really want to care:

• You may act like Warren Buffett and worry about the stock market with just having $364 in an index fund if you like anxiety charts.
• If you want to blame the Fed for everything, even your bad Bumble date, you should be worried about the M2 money supply.
• You could also just do what the rest of us do: complain, doomscroll, and then obtain a poor BNPL loan to buy tickets to a concert.

In conclusion, you’re now an economist (not really)

Wow, you made it through this terrible breakdown. You now know one more economics word you can use during brunch to make yourself sound clever. Till someone asks you additional questions. But you know what? Just act like it until you pay off your student loans.

So, whether you ride the ups and downs of the stock market or check M2 charts like they’re your ex’s Instagram, just know that none of us are going to make it out of this hellish world of broke millennials alive.

Well done.