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Originally Posted by pocketkangaroo
Your statement couldn't be farther from the truth. The M2 is the report that shows how much money is in play in the US. It is used by most people who watch the money supply as an indicator of the economy.
The M3 is just the M2 plus Eurodollars and repurchase agreements. Eurodollars is not money in play in the US and a repurchase agreement usually is only in play for very short periods of time. The M2 has always been the report of choice.
Nonetheless, those with tin foil hats on about this could simply calculate an M3 themselves as the data to do so is still readily available.
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Wrong. Without the M3 you don't know how much money they are creating and putting into circulation. This is what determines the dollars worth.
1. M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of
nonbank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and
foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits
(OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union
share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, traveler's checks,
demand deposits, and OCDs, each seasonally adjusted separately.
2. M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in
amounts of less than $100,000), less individual retirement account (IRA) and Keogh balances at depository institutions; and (3) balances in
retail money market mutual funds, less IRA and Keogh balances at money market mutual funds. Seasonally adjusted M2 is constructed by summing
savings deposits, small-denomination time deposits, and retail money funds, each seasonally adjusted separately, and adding this result to
seasonally adjusted M1.