Does the definition for M1 or M2 money supply include the money banks produce every time they lend money they don't have?
Discussion
Maybe James Lavish @james could answer?
M3 and M4 does for sure
M3 & M4!
They are motorways in t he UK?
🤣
M4 is the broadest measure of money supply and includes all forms of deposits that can be converted into cash and used for transactions. Every credit unit that a bank creates out of thin air fall under this definition because it can be converted to cash or equivalents.
Do we know what this figure is globally?
There are estimates around 500 trillions, bonds included of course.
But I’ll say is much more because of all the shadow banking system.
How does that fit into the generally quoted:
$454T of global wealth
And
$315T of global debt
https://www.visualcapitalist.com/global-wealth-distribution/
https://www.weforum.org/stories/2023/12/what-is-global-debt-why-high/
Yes. M1 includes demand deposits (checking, savings, etc) at banks - which includes an awful lot of money banks just made up to lend to their customers. M2 also includes more medium-term deposits like money market funds - which includes even more money banks had loaned to their customers. Then there's M3 - which includes even more bank loaned money that the Federal Reserve doesn't even bother trying to track of anymore.
M0 (or Monetary Base - which is technically slightly different than M0) accounts for only money that are liabilities to the Federal Reserve (i.e. excluding the money banks loaned that they didn't have).
(this is how the U.S. categorizes M0, M1 and M2, though I believe other nations may differ slightly).
Damn, I can't even remember what level is the actual paper money.
My brain has so little storage space, I forgot everything I read about these M money supplies except Bitcoin's market cap isn't anywhere near as high as ANY of them yet so we're really early.
You're pretty smart, Judge.
I've just been obsessed with trying to keep track of this fraudulent system ever since the 2008 Global Financial Crisis.