Global M2 money supply 2025: When the "money printing machine" runs at full speed

While Bitcoin continues hitting new highs and gold oscillates around $3,350, there's a "silent" but extremely important factor driving all markets - the global M2 money supply. The projected $127 trillion USD by end of 2025 isn't just dry statistics but the "key" to understanding why risk assets are surging so strongly.Today I want to "decode" the meaning of these numbers and investment opportunities they bring.

M2 Money Supply: The "fuel" of financial markets

What is M2 and why does it matter?

M2 definition:

Cash in circulation
Demand deposits (checking accounts)
Savings deposits (savings accounts)
Money market funds (money market funds)
Time deposits <2 years (time deposits)

Why M2 matters: M2 represents "purchasing power" available in the system. When M2 grows rapidly, it means more money is "chasing" the same amount of assets → Asset price inflation.Historical correlation:

M2 ↑ 20% (2020-2021) → Stock market +30%, Bitcoin +300%
M2 ↓ 2% (2022-2023) → Bear market across all assets
M2 ↑ 18% (2025 forecast) → Current bull market

The "massive" number: $127 trillion USD

2025 timeline:

Beginning of year: ~$105 trillion
Mid-year: ~$123 trillion (+3%)
End of year (forecast): ~$127 trillion (+18% YoY)

For perspective:

$127 trillion = 1.3x global GDP (~$105 trillion)
18% increase = $19 trillion new money "printed"
$19 trillion > China's GDP ($17.7 trillion)

Bottom line: The amount of money created in 2025 is larger than the world's second-largest economy!

Central Banks: Who's "printing money" the most?

Federal Reserve (Fed) - US

Current policy stance:

Rate cuts cycle: From 5.25% down to projected 3.5% year-end
QE restart: Not official but balance sheet expansion
Political pressure: Trump administration wants easier money

M2 impact:

US M2: Forecast 12-15% growth in 2025
Dollar liquidity: Flooding global markets
Spillover effect: USD weakness → EM currency strength

European Central Bank (ECB) - Europe

Aggressive easing:

Rate cuts: From 4% down to projected 2.5%
TLTRO revival: Targeted lending programs
Green QE: Asset purchases for climate transition

Eurozone M2:

Growth rate: 15-18% in 2025
Regional disparity: Germany conservative, Southern Europe aggressive
Currency impact: EUR weakness vs USD

People's Bank of China (PBOC) - China

Stimulus measures:

Reserve Requirement Ratio (RRR): Multiple cuts
Targeted lending: Real estate, infrastructure
Yuan devaluation: Competitive export strategy

China M2:

Massive expansion: 20-25% growth forecast
Sectoral focus: Property rescue, manufacturing support
Global impact: Commodity demand surge

Bank of Japan (BOJ) - Japan

Ultra-loose continuation:

Negative rates maintained: -0.1%
Yield Curve Control (YCC): 10-year JGB at 0%
Unlimited QE: No ceiling on asset purchases

Yen implications:

Currency debasement: JPY weakest G7 currency
Asset inflation: Nikkei, real estate surge
Carry trade revival: Borrow yen, buy everything else

Asset allocation: Where is money flowing?

Equity markets: "Everything bubble"

US stocks:

S&P 500: Multiple expansion from P/E 18 → 25+
Mega caps: FAANG+ benefit from liquidity premium
Small caps: Russell 2000 outperforming on liquidity

International equities:

European stocks: DAX, CAC40 new highs