What monetary stimulus?
I was chatting with a friend about the state of the economy, and I brought up how the monetary expansion that began in 2008 wasn’t actually stimulative because the Fed started paying interest on excess reserves. My friend expressed a little skepticism that excess reserves mirrored the monetary expansion one-for-one. But behold:
![](https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58121d3e-bd96-4d7f-965a-2100e7b493b4_630x378.png)
No, it’s not literally one-for-one, but it’s close. Non-circulating money gives me the vague impression of a tree falling in the woods with no one around to hear it.