J. J.
Atlas Superstar
Posts: 32,892
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« on: March 25, 2006, 09:41:46 PM » |
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I'll add, agreeing with jmcfst, that there use to be another measure of liquidity, L. It included all of M0 through M3, but added T-bills, Savings Bonds, Term Eurodollars, and Commercial Paper. It's not being reported.
The thing is, in terms of M, the Fed is looking at assents that are going to readily used in transactions. Things like Eurodollars or large time deposits are not readily spendable.
It's like buying a small house for $50,000 cash. You still have that asset; assuming that it's a fair price, you'll still have the same amount of assets. You cannot, however, readily spend that house.
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