3 ms·

I understand M1 includes the most liquid portions of the money supply in circulation. When the Fed "prints" money I don't think they are talking about physical

• aniro 6y ago
  "The money supply measures reflect the different degrees of liquidity—or spendability—that different types of money have. The narrowest measure, M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written. M2 includes M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds." From the Fed itself: https://www.newyorkfed.org/aboutthefed/fedpoint/fed49.html https://www.newyorkfed.org/aboutthefed/fedpoint/fed49.html
• R0b0t1 6y ago
  The money is physical in the sense that people are able to extract value from it. It is given to a bank to loan out, essentially for free, and they are able to keep the interest. So if you're a bank you basically are given free money by the government.