What can be done about the myth that the Federal government only has limits amounts of money

[septimus]

@LinusK

MB, I believe, stands for monetary base. You’re suggesting, I think, that “doubling” its “nominal value” would devalue the dollar. Yet it’s more than quadrupled in the last few years, without affecting the value of the dollar. In fact, the dollar is worth more against the euro than it was then.

The measurements of “money” are somewhat fuzzy and arbitrary. Banks A and B may have demand deposits in each other; that “money” is a “wash;” rightfully such money isn’t counted in M1 (or any “M”). However some money that is, conceptually, a similar such “wash” is counted.

Demand deposits on the FRB are counted in MB, although to some extent these deposits play a role similar to inter-bank deposits which are not counted. Although not a full explanation, this is part of the reason for the recent surge in MB.

LinusK, some of your focus on “money” makes me think you missed, or did not believe, my response in another thread:

@septimus

Having a $500 checking account at the Federal Reserve Bank is, similarly, similar to having $500 in Federal Reserve notes! * IOW, a F.R. banknote is very similar() to a Traveler’s Checque, but is drawn on the Central Bank instead of a private bank. Remembering this simple fact would clear up some of the confusion about U.S. “money.”