Unca Cece covered the relative amounts of printed money vs. money in the system a couple of decades ago. It seems like things have changed quite a bit since then, so in the simplest terms, what percentage of US money today is represented by physical bills and coins?
(I’d just look it up, but I’m not sure the indexes he referred to are still used in the same way and still represent a valid answer - so I need someone up on current macroeconomics that isn’t a gold bug here… 
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It depends a lot on the definition of money you use. There’s a number of differing monetary aggregates in use in economics, and they differ to the extent that non-cash assets are included in, or excluded from, the scope. This website gives up-to-date data from the Fed. The monetary aggregates it distinguishes are M1 (which, essentially, includes coins and bills plus demand deposits, i.e. money in bank accounts that can be withdrawn any day) and M2 (which includes M1 plus certain time and savings deposits, i.e., money in bank accounts where restrictions on withdrawals apply); the precise definitions are listed on the website. Currency, i.e. bills and coins, was 1,134.5 billion dollars as of August 2013, which according to that site is about 44 % of M1 and 11 % of M2.
I don’t blame OP for getting confused! From M0 (coins and banknotes), to M1, M2, M3, M4, (and some introduce a M5) one gets increasingly broad measures and even the broadest measure doesn’t include much that some would consider “money.” The lines are arbitrary and somewhat fuzzy (See note *). Even within a single measure, there are variations: M4- is M4 with T-bills excluded; MB is M0 with certain “vault funds” (incl. vault funds excluded from M1).
Since the financial crisis, U.S. M1 has increased by almost a whopping $1 trillion. Yet M1/MB (a version of the ratio OP is asking about) has declined to much less than unity ! :smack:
This, IIUC, is because the Fed’s QE program has been stuffing bank’s coffers with something akin to fiat money, and that money may not even make its way to M1, let alone M2 or M3. I hope Hellestal will be along to clarify my own misunderstandings and to put this in perspective.
(Another notable feature on the linked graph is that the M1/MB ratio fell during the late 1980’s and 90’s from above 3 to less than 2. That was largely just a result of a household banking trend: moving “ready” money from one type of bank account to another that paid higher interest.)
(* - Note: Recently I wanted to deposit into a 12-month time-deposit at our non-U.S. bank. The bank steered us to a higher-interest 11-month deposit! :dubious: This seemed weird, but maybe resulted from bank or government policies intended to change the M3/M2 ratio.)
Think about your own personal money -
I typically have about $300 max in cash. Maybe $500 if you count collectibles like the Canadian $100 bill from the 1970’s and a wad of interesting collectible but real coins. Add maybe $1500 for that gold coin in the basement. (M0?)
I pay all my bills from my bank account online. Our paycheques go directly into there. Therefore, at any time we have between a few hundred and up to a few thousand in the bank. (M1?) Technically, it should include about $20,000 in credit card limits too, I suppose.
There’s the almost $200,000 room on our house line of credit which we’ll never use. Not sure what category that falls into. I suppose possible loans, like credit card limits, do not count as Mn-type assets?
There’s my and my wife’s RRSPs (like IRA or 401k) a few hundred thousand, which have tax penalties if we take them out. (M2?) Not sure how I account for my share of a company pension plan…
Not sure how this has changed in the last 20 years, other than my savings are bigger and online has replaced cheques.
So as a typical middle-class couple, our M0 assets represent much less than 1% give or take of monetary assets. For poorer people the percentage is higher, for richer people, a lot more of their money is electrons.
I assume the same applies for businesses. Except for consumer retail, most businesses exchange money in electrons. The several consumer retail businesses I’m familiar with, more than 75% of receipts are debit and credit versus 25% or less cash. (B2B is usually exclusively electrons or cheques) The proportion of real cash used drops significantly as the cash register total goes up.
But, that’s cash register receipts. the daily cash amounts are delivered to the bank and recycled for the next week’s business flow. When the business pays for inventory, it does so in electrons from a pool accumulating in the bank.
The best definition of money is cash (currency and coin) plus commercial bank deposits, plus what the Fed calls “reserve balances” (money banks have on deposit with the Fed.)
Currency in circulation is $1.2 trillion. Link.
Bank deposits are $9.5 trillion. Link.
Reserve balances are $2.3 trillion. Link.
So a total of $13 trillion of “money”, a little less than 10% is cash.