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Below, Andrew Barber, and I have attached a 10 year chart of European M3 Growth (money supply). The impetus for this note is that the Europeans reported a big +9.3% year over year growth in this critical inflation metric this morning. Yes, the growth rate has come down from it’s all time highs, but the point it is that its running way too high versus current stagnant regional economic growth.

The Euro itself, was introduced to the world markets as a currency in 1999, so this chart maps a critical duration that needs to be understood within the "its global this time" macro narrative.

Europe has never endured an protracted period of economic stagflation with all of the countries in Europe tied to the same currency horse.

Is there tail risk on this horse? You bet!

KM