Definitions from "U. S. Financial Data", Federal Reserve:
M1: The sum of currency held outside the vaults of depository
institutions, Federal Reserve Banks, and the U.S. Treasury; travelers
checks; and demand and other checkable deposits issued by financial
institutions (except demand deposits due to the Treasury and depository
institutions), minus cash items in process of collection and Federal
Reserve float.
M2: M1 plus savings deposits (including money market deposit
accounts) and small-denomination (less than $100,000) time deposits
issued by financial institutions; and shares in retail money market mutual
funds (funds with initial investments of less than $50,000), net of
retirement accounts.
M3: M2 plus large-denomination ($100,000 or more) time deposits;
repurchase agreements issued by depository institutions; Eurodollar
deposits, specifically, dollar-denominated deposits due to nonbank
U.S. addresses held at foreign offices of U.S. banks worldwide and all
banking offices in Canada and the United Kingdom; and institutional
money market mutual funds (funds with initial investments of $50,000
or more).
You say: "When you realize M3 measures credit and lots of things that are double counted, and not just money, then why can't credit implode in a big recession, perhaps shockingly so"
I guess the money market mutual funds are based on short term loans and could be called "credit." It is also true that much of the money supply results from the expansion through fractional reserve banking and can contract.
Are there any measures of the money supply that you think are genuine measures? It seems to me that at one time or another you have rejected them all: MZM, M1, M2, and M3. |
