The countries that found themselves in the top of the chart when the sovereign debt tensions started in 2009 – that is Greece, Spain, Ireland, Portugal and Italy – all ran into trouble one after the other. This is no coincidence. Currently, adjustments are hard-handedly being enforced by the markets.
The recent strength in M3 growth partly reflects both the low opportunity cost of holding money and renewed portfolio shifts into M3 in an environment of financial market uncertainty. In this context, monetary trends need to be assessed with caution.