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Originally Posted by Firebot
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OK, you've got me. There was a single month with a tiny drop (likely due to seasonal adjustments), at which point it started increasing again. In the end, there will be more money at the end of the year than the beginning, just as there is every year.
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Holdings is money supply.
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What? No it isn't. The Bank of Canada owns assets, the vast majority of which (86%) are Government of Canada bonds which they're slowly rolling off as they mature and aren't repurchased. But their holdings only represent about 15% of Canada's M2+ ($431B of $2.9T).
So they'll continue to roll off their assets over several years (the current pace is about $100B a year), but there will still be new money created in that period leading to a growth in the money supply. The exact same thing happened to a lesser degree after 2008:
Bank of Canada Assets:
January 2009: $79B
January 2010: $71B (10% drop)
January 2011: $61B (14% drop)
Canada's M2+:
January 2009: $1.24T
January 2010: $1.31T (5.8% increase)
January 2011: $1.36T (4% increase)
So over 2 years the Bank of Canada's assets were reduced by ~23% while the money supply increased by ~10%.