| | We've in the past discussed what might be the best measure of the quantity of the USD/FRN money supply. I've in the past vouched for using the monetary base (FRED BASENS.
Fed Monetary Base
Today I stumbled upon the "Fiat Quantity Money" measure by Alasdair Macleod. I havne't yet found any source for getting more periodic updates on this measure... it would be neat if someone posted bi-weekly updates for this like the FRED.
"Fiat Quantity Money"
You can actually see the dot-com bubble burst reaction and the 2008 housing bubble burst reaction... and the inflation spike before them that caused the bubbles in the first place. I really like the idea of using "reversing back to a gold standard" as a measure of money supply. Then its just a question of which method would be used if everybody at once demanded withdraw of their deposits: 1. Default or 2. Print money. Given that #2 was used, FQM would be the best measure of the FRN money supply. Given #1 was used, BASENS would be the best measure of the FRN money supply. I'd say that #2 is more likely to be the method chosen.
Given FQM, that puts the FRN money supply at ~12T (as of sept 2013). Given BASENS, 3.75T.
Said in a different way... BASENS is one level of money printing (by the central bank), verses FQM is another level of money printing at the FDIC bank deposit level.
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