erve_bankingComponents of US money supply (currency, M1, M2, and M3) since 1959. In January 2007, the amount of central bank money was $750.5 billion while the amount of commercial bank money (in the M2 supply) was $6.33 trillion. M1 is currency plus demand deposits; M2 is M1 plus time deposits, savings deposits, and some money-market funds; and M3 is M2 plus large time deposits and other forms of money.
3 comments:
Yeah, it isn't sustainable, that's why we are in a recession right now. When people making minimum wage have tens of thousands of dollars of credit card debt, that is a sure way of raising the fractional reserve.
I'm more concerned about a multi-trillion dollar budget that, according to those numbers on that graph, appears to be equal to the entire amount of bank money in the country. Making a budget plan that emulates those irresponsible credit card debtors and spending huge sums of money that you don't have seems far more preposterous.
This is not a problem with the banking system, it is a problem with people who have zero financial responsibility.
We were in a recession in 73-75, 80-82, 90-91... none of those did much to slow the exponential growth in the money supply.
the budget has to be as large as it is in order to continue the "growth" that we have all come to know and love. you better get used to trillions and billions, they are here to stay. what i'm concerned for is my "retirement" savings which is growing at a much slower rate :(.
the problem with the banking system is that it needs those zero financially responsible people to continue being irresponsible (current administration included).
I guess I just don't really see a problem with an exponential growth in the money supply. It seems utterly arbitrary. Even with such a huge increase in supply of money, we haven't seen crazy inflation or deflation, so what impact does it have?
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