2006-09-16 21:58:22 · 3 answers · asked by marcos mutti 1 in Business & Finance ➔ Investing
The broader the money supply, the greater the price inflation. Since M3 is a measure of all money in the market (both physical & electronic).
M1 - is all coin & paper money including demand deposits (checking & NOW accounts)
M2 - is M1 and all time-related deposits (savings acccounts & non-institutional money-market funds).
M3 - is M2 and as well as all large time deposits, institutional money market funds, short term repurchase agreements and other large liquid assets.
You can print more money, but it is easier to create virtual money. All 3 can drive inflation, but when you create money out of "thin air", you really drive inflation.
If you notice, as of March 23, 2006, the Fed no longer reports M3. I believe they did that to mask their money creation activity.
2006-09-17 11:31:10 · answer #1 · answered by 4XTrader 5 · 1⤊ 0⤋
Refer the following
http://en.wikipedia.org/wiki/Money_supply#Latest_US_M3_numbers
2006-09-17 05:06:05 · answer #2 · answered by Vazvil V 3 · 0⤊ 0⤋
if u mean mechanics 1,2 and 3........no.
2006-09-17 05:07:10 · answer #3 · answered by sifatmasum 2 · 0⤊ 0⤋