Episode-12- What is the M3 Money Supply and What Does it Mean to You?

So just what is the M3 Money Supply? It is the value of all U.S. Dollars in Circulation. The M Factors of US currency are broken down as follows,

  • M0: M0 (M-zero) is the most liquid measure of the money supply. It only includes cash or assets that could quickly be converted into currency. This measure is known as narrow money because it is the smallest measure of the money supply.
  • M1: M1 is M0 + checking accounts. This is used as a measurement for economists trying to quantify the amount of money in circulation.
  • M2: M2 is M1 + small time deposits (less than $100,000), savings deposits, and non-institutional money-market funds.
  • M3: M3 is M2 + all large scale deposits (over $100,000), institutional money-market funds, short-term repurchase agreements, along with other larger liquid assets. The broadest measure of money; it is used by economists to estimate the entire supply of money within an economy.

Now it just so happens that the Federal Reserve stopped publishing the U.S. M3 numbers back in 2006, to, “save money and because the M3 number doesn’t really tell you anything that the M2 number doesn’t.”

I am sorry but this is a huge cop out.

  1. You can bet that the Fed knows the M3 number, publishing it is releasing a number, not much can be saved by not publishing it, the work to calculate the M3 Supply is still being done.
  2. Large scale deposits (over $100,000) and institutional money-market funds are exactly where money pumped into the system by the Federal Reserve actually go! Not publishing this number has freed the Fed to pump in money at will and keep the average person ignorant to what is going on.

Listen to this edition of The Survival Podcast and learn

  1. How pumping in money to our economy is like splitting a stock with out giving new shares to those who own it. Effectively cutting the value of the dollar by 32% in the last 27 months that M3 has not been published.
  2. How the consumer price index has been replaced with “core inflation” so that our current inflation rates ignore two of your biggest expenses, ENERGY and FOOD!
  3. How the Fed’s Solution to loan and print even more money is sending us on a road to disaster most people can’t even fathom.
  4. Why the cost of everything that people need to survive and work in the U.S. is going up but we are being told that inflation is “flat”.

In short the rate of inflation is ignoring the decline of the dollar, the increase in the cost of food and the increase in the cost of gas and other energy products to falsely and temporally prop up the declining U.S. and Global Economies.

Here are some of the resources I used for data for this podcast

3 Responses to Episode-12- What is the M3 Money Supply and What Does it Mean to You?

  1. Jack, first the lapel mike makes a significant difference in the audio quality and improves your clarity; $9 well spent (frugal, not cheap…). I am listening to the July 10th podcast on the M3 Money Supply (will have to find out what the Canadian equivalent is as this interests me), so I may post back later on this.

  2. Modern Survival

    Hey thanks for yet another comment and the feed back is well appreciated. M3 by the way is the same in all currencies you should be able to locate the Canadian M0-M3 with a little googling, in any event I will see what I can dig up and post a link or two for you.

    Be sure to tune in tomorrow for a podcast about Green Energy and how it can benefit the individual the implements it rather trying to persuade people that buying a 45K Hybrid is “saving the planet”.

  3. I’ll be listening with interest; if you have time to amend your podcast for tomorrow (and maybe you’re going to cover this as well), the idea using what you have and not replacing (for example, that 2006 Diesel Jetta you have… with a 2007 Hybrid) with something new, just because it’s green. What I mean is, it only makes sense to replace if a) it’s better than what you currently have and b) that what you have needs replacing; as well, that the TCO (Total Cost of Ownership) from dust to dust is better for the planet than keeping what you have (in good shape, et al.) presently.
    My family, as noted in another post, lives in the city and do not need a car/truck, so we live without and use public transit, our feet or bikes.

    On a side note, $45K would be great to have, $15K to pay off non-mortgage debt and the rest to buy and install a Solar Hot-Water system (as my house is heated by a boiler) and a 1KW PV array. 🙂 (well, that’s dreaming at the moment)