EyeDrMike,
re: M1, M2 and M3 I'm no expert. I do know that these are three measures of the money supply, each progressively less liquid starting with M1, the most liquid.
M1 is the total amount of U.S. currency and checking account deposits in the country--in the US.
M2 is M1 plus some other things. The total amount in savings accounts for instance. Generally, money not as easily accessible as M1.
M3 is the broadest measure of the money supply. Its is M2 plus some other things. Generally, total amount of money even less accessible than M2 (e.g., money tied up in a CD or something of the sort). The exact components of M1, M2 and M3 are in the fine print in the Fed link I posted.
Neither M1, M2 or M3 include money floating around outside the U.S.
So what the Fed report shows is the domestic anual rate of increase of these money supply measures over various time periods (e.g., last three months).
As I mentioned in my earlier post, M1 decreasing relative to M2 and M3 does not suggest a "liquidity crisis" because liquidity crises have traditionally boosted demand for M1--hard, immediately spendable currency--relative to less accessible measures of the money supply.
All that is my understanding anyway. |
