Global (World) Monetary Supply M2 (measured in USD)

The Global (World) Monetary Supply M2 (measured in USD) indicator provides a comprehensive aggregate view of global liquidity by summing the M2 money supply of major economies converted into US Dollars. This tool serves as a macro-economic benchmark for identifying trends in global fiat expansion and its historical correlation with risk assets like Bitcoin and equities.

Usage

The Usage section describes how the script can be used, examples should be provided in this section. This tool is primarily used for macro analysis to determine if the global economy is in a period of monetary expansion or contraction.

• Asset Correlation: Traders often use this indicator to find leads or lags between money supply growth and asset price appreciation. For example, a rising Global M2 often precedes or accompanies bullish trends in the crypto and stock markets.
• Time Shifting: The script includes an offset feature allowing users to shift the data horizontally. This is useful for backtesting correlations where one asset historically reacts to liquidity changes with a specific delay (e.g., shifting the M2 line by 107 days to align with Bitcoin cycles).
• Trend Monitoring: By observing the slope of the M2 line, users can identify shifts in central bank policies across the world's most populous and wealthiest nations.

Details

The script aggregates data from various economic regions including the Eurozone, North America (USA, Canada), Non-EU Europe (Switzerland, UK, Russia), Asia (China, Taiwan, Hong Kong, India, Japan, Philippines, Singapore), Latin America (Brazil, Colombia, Mexico), the Middle East (UAE, Turkey), and Africa (South Africa).

The calculation involves fetching the M2 supply in the local currency of each nation and converting it into USD using real-time or historical exchange rates (e.g., ECONOMICS:CNM2 * FX_IDC:CNYUSD). It is important to note that this indicator specifically tracks M2 money supply (cash, checking deposits, and "near money" like savings deposits) and does not include total global liquidity factors such as central bank balance sheet assets held in foreign currencies.

Settings

• Label: Toggles the visibility of a text label on the right side of the chart that displays the current aggregate Global M2 value in trillions (T).
• Offset (move the chart horizontally in time -time shift-): Adjusts the horizontal position of the plot. Positive values shift the data forward in time, while negative values shift it backward. This is used to align liquidity peaks with price peaks of other assets.

FAQ

How do I interpret a rising Global M2 line? A rising line indicates that the aggregate supply of money across the tracked nations is increasing. Historically, this increase in liquidity is associated with higher demand for risk assets and potential inflationary pressure.

Why is the data measured only in USD? Measuring all currencies in a single denomination (USD) allows for a standardized comparison and a unified total. It accounts for both the printing of local currency and the relative strength of that currency against the world reserve currency.

How can I access the Global (World) Monetary Supply M2 indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.