GDP revisions and M2 Money Supply

Goldman Sachs announced that GDP projections revising GDP for the 2H2010, as well as 1Q2011, downward to 1.5%.  Goldman says that the rest of 2011 will experience very little growth, projections around 3%.  This poses a problem for our country.  With GDP slowing, our debt will soon overtake the 100% mark.  The reduction of GDP is believed to be due to the withdrawal of stimulus, thus proving that this recovery was false.  It will take another infusion of stimulus to change the direction again (but that will add more debt to the U.S. Taxpayers).

Equally important is a trend reported on zero hedge about the M2 money supply which is growing.  As you can see M2 money supply has expanded about 175 billion since last April.  For those not familiar with M2, economist look at M2 when looking at the quantity of money in circulation.

M2 money supply includes M1 (which includes only checkable demand deposits), savings and other time deposits.  We watch this to see how much money is being printed into the economy possibly devaluing our currency.  M0, M1 and M2 are considered to be our primary money supply components, but do not contain credit.  There is a pretty good primer on money supply at this link.