How Much Money in the World

I have commented on this previously but here is a link that gives it some metrics.

Starting with the US Dollar:

Begin copy from the link;

The first way to look at it might be, "How much cash is there in U.S. currency?" If you took all the bills and coins floating around today and added them all up, how much money would you have? All of that hard and easily liquidated currency is known as the M0 money supply. This includes the bills and coins in people's pockets and mattresses, the money on hand in bank vaults and all of the deposits those banks have at reserve banks [source: Hamilton]. According to the Federal Reserve, there was $908.6 billion in the M0 supply stream as of July 2009 [source: Federal Reserve]. That sounds like an incredible amount, but think about it this way: According to the CIA, there were 307,212,123 Americans alive that month [source: CIA]. If you took all the cash and divided it up equally, each person should have about $3,000 in cash on them (or stuffed under the mattress). Obviously, there's some money missing, but there's an easy explanation for that: The Federal Reserve says that at any given time, between one-half and two-thirds of the M0 money stock of U.S. dollars is held overseas [source: Federal Reserve].

The rest of the money is held in bank accounts of various types, and the Federal Reserve tracks these funds in three different values known as the M1, M2 and M3 money supplies:
M1 represents all of the currency in the M0 money supply, plus all of the money held in checking accounts and other checkable accounts, as well as all of the money in travelers' checks. In July 2009, the M1 money supply for U.S. dollars equaled about $1,655.6 billion [source: Federal Reserve].

M2 is the M1 supply, plus all of the money held in money market funds, savings accounts and small CDs. In July 2009, the M2 money supply was about $8,326.8 billion [source: Federal Reserve].

M3 is M2 plus all of the large CDs. As of March 2006, the Fed no longer tracks the M3 money stock as an economic indicator. That month, M3 totaled around $10.3 trillion [source: St. Louis Fed].
All told, anyone looking for all of the U.S. dollars in the world in July 2009 could expect to find around $8.3 trillion in existence.
Even though the Fed can't say precisely where all the U.S. dollars are in the world, it does try to keep track of how much exists. Not every nation in the world has a well-established central bank, though. Find out why it's so difficult to track exactly how much money exists in the world on the next page.

End copy from the link.

This is the total cash in US currency as of July 2009.  About $8.3 trillion dollars.  While the Fed no longer tracks M3, consisting of all large CD's as an increment to M2, they continue to be considered part of the money supply.  They simply are not tracked.  That does not mean they are not part of what we call all US Dollars.

MO and M1 are the workhorses of the medium of exchange.  The money that passes from hand to hand in daily transactions.  The most liquid of US cash dollars.  M2 and M3 are less liquid and have to go through a change process to transfer to a spendable form as MO or M1 depending on what form of money you want to use to do your spending.  Dollar bills or money in a checking account (on a debit card) that you spend.

Credit spends the same as cash.   That is a factual statement.  An obvious statement.  Of course it does.  Google that statement in quotes and it returns exactly one hit which is a reply comment buried down in this threaded link: http://www.arizonasportsfans.com/vb/f66/global-plans-to-replace-the-dollar-159897-2.html


It seems to me that this statement would be more commonly expressed and get more than one hit on a google search.  Credit is cash, it expands the money supply as it increases debt in a debt money system.  Credit however is not counted in the total of US currency dollars?

Dr. Econ at the San Francisco Federal Reserve says here that credit is not part of the money supply.  Credit is not money.  He explains that money is an asset.  A credit card transaction creates a liability.

"Why is it important to distinguish between financial assets (like money) and liabilities (like credit card debt)? First, from an economic standpoint, the Fed measures the amount of money in the hands of the public because of its potential use as an indicator of monetary policy; the money supply measures reflect the different degrees of liquidity that different types of money have. See Ask Dr. Econ (January 2003) for some historical perspective on the use of the monetary aggregates."

Hey, Dr. Econ:  Money in the hands of a user that can spend it is an asset to the user.  However all money is fundamentally debt money created by a loan. Credit is a loan to an end user to spend.  All loans are money to an end user to spend.  That loan, that debt creates money.  Credit is an expansion of the money supply.

Dr. Econ adds:

"From a personal finance perspective
Finally, the difference between money and credit also is important from a personal finance perspective. You shouldn’t view a $1,000 credit card limit the same way you would view $1,000 in cash. Spending today using a credit card loan means that at some point in the future you will have to reduce your spending in order to pay back that credit card balance and any accumulated interest!"

OK wise guy.  How about this:  You shouldn't view buying anything on credit the same as buying with cash.  You have to reduce you future spending in order to pay it back.  Like a mortgage.  Home loans create an expansion of cash in the money supply!

Credit creates an expansion of cash in the money supply!

This also says that credit card purchases is  not an increase in the money supply:

"The question is imprecise. So in order to answer it I must make an assumption. I assume that what it really means is "Should credit card lines of credit be counted in the money supply". The simple answer is no.
Money is defined as the commonly accepted medium of exchange. The accepted medium of exchange in the US are cash dollars and checking account dollars. No-one accepts a line of credit as a medium of exchange in transactions.
If, however, someone makes a payment using his credit card then actual money is credited to the sellers checking account. The money supply increases after the payment has been made. The bank issuing the credit card essentially makes a loan to the person using the credit card and actual money is credited to the seller's account.
But even then, it is not the credit card balance in itself that adds to the money supply, but the money appearing on the seller's checking account.
Only in that sense can one make a connection between the existence of credit cards and the money supply.
More details on how to define the money supply can be found here: http://nimamahdjour.blogspot.com/2008/03/money-supply-watch.html

Read more: http://wiki.answers.com/Q/Should_credit_cards_be_counted_in_the_money_supply#ixzz22am07zd7"


So, the money paid the seller is what adds to the money supply, not the credit extended as a loan to the buyer.  OK, wise guy.  The amount of purchase paid on a credit card equals the amount received and immediately added to sellers bank account.  That increases the money supply until such time as the credit loan is repaid taking an equal amount of money out of the money supply as the time the loan is repaid.  During the amount of time the credit loan was outstanding it increased the money supply.  It was debt created money.  All money is debt money. 


The contribution of credit to the total money supply is equal to the total amount of national revolving credit card credit!!!!


This link gets it right

"When someone uses a credit card in a purchase, he automatically expands the money supply.  The seller receives a new deposit in his account, which increases the total of demand deposits in the banking system -- until the buyer pays off the loan.  The result is that consumers who roll over their credit card loans rather than paying them off have increased the money supply on their own initiative by hundreds of billions of dollars.  In effect, the money supply is substantially larger and less measurable than the Fed's definition."

eHow says credit it is not part of the money supply.  Like money was a real asset but credit is not, it is a loan.  Dumb enough for the common person to understand.  Don't want to tell them that all money is debt!