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Non-Tech : Money Supply & The Federal Reserve -- Ignore unavailable to you. Want to Upgrade?

To: Cush who wrote (1)	8/10/2002 7:39:44 PM
From: Mike Chupp	Respond to of 1379

Cush, M2 is a number reported to the FRB by banks. It is not a manipulated number. Sure it gets revised by reporting bank errors and sometimes an internal FRB error. For example last weeks file got reloaded over this weeks. One final comment and I will quit posting for tonight. The swings in M0 that you have noted are related to changes in the velocity of money. When velocity is high dollars change hands very often, creating a multiplier effect. When velocity slows the dollars available are attenuated. MUCH attention is paid to velocity by economists and if velocity slows enough the frb asks the treasury to turn on the printing presses. Mike