The M3 is a wider view of the amount of money value in the economy that can be can be used to pay debt. Inflation can mean that there is a surplus of money in the economy and the historical change in the M3 might be the first place to look for those pressures. IANAE.
The are four measures of
money supply
in the economy;
IANAE, but it appears there is more money supply in 2004 than in 1980. I don't know how it can be determined from that graph that there is more money than there is demand which can cause inflation.
The above graph is the components of the M3 money supply broken out and graphed since 2000. It appears broad money and deposits with non-banks have increased more than the other components during that period. I do not know what that means in relation to inflation though.
- M0: All physical currency
- M1: The M0 plus in demand accounts.
- M2: The M1 plus savings accounts, money market accounts.
- M3: The M2 plus all CDs (over 100,000) and repurchase agreements.
- Currency
- Current deposits with banks
- Other deposits with banks (Certificates, term, other)
- Deposits with non-bank
- Non-deposit borrowings from private
- Broad money
IANAE, but it appears there is more money supply in 2004 than in 1980. I don't know how it can be determined from that graph that there is more money than there is demand which can cause inflation.
The above graph is the components of the M3 money supply broken out and graphed since 2000. It appears broad money and deposits with non-banks have increased more than the other components during that period. I do not know what that means in relation to inflation though.
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