Uncovered: share prices and speed of money The first week of Unhedged is over. How are you? Send an email: [email protected]. QE and share prices (second part) Here are two lines that usually go up and to the right: The two lines are the M2 cash supply (cash, deposits, money market accounts) and the S&P 500. M2 is growing rapidly due to quantitative easing: the Fed buys bonds to make money and therefore puts in new money. S&P is rising so fast why it’s not so clear. The fact that the two lines have moved together lately is pushing for a well-known causal story: “The Fed is printing money, and it has to go somewhere, and it’s going into the stock market.” I a couple of days ago indicate cause these stories are wrong because money does not become stock. When I buy shares, the seller gets the money. There is no “stock market”.