<p>The Fed began including savings deposits in M1 in May 2020. See <a href="https://www.federalreserve.gov/releases/h6/h6_technical_qa.htm" rel="nofollow noreferrer">Technical Q&amp;As</a>, specifically the items posted on 12/17/2020.</p>

CC BY-SA 4.0
2023-11-11T16:08:55.803Z
Thanks for your helpful info.  That's an important fact, but it might not be relevant here.  Even if M1 was changed to include savings (which seems like the right move), wouldn't historical M1 numbers be adjusted accordingly (aka normalized)?  In other words, charts would still accurately depict a drastic change.
QuietInMontana
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2023-11-11T20:00:15.803Z
Actually they didn't adjust the historical numbers because the regulations for savings deposits were different before May 2020. But you could probably find historical data for savings accounts (as part of M2) and generate a pseudo-M1 history.
Daniel
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2023-11-12T15:50:51.670Z
I'm not saying you're wrong but it's so hard to believe the data guys would have overlooked this.  I agree that the regulations would be different before May 2020, but I can't believe they wouldn't recalculate previous years based on the new regulation.  Normalizing is usually the first thing statisticians do.
QuietInMontana
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2023-11-15T21:27:46.180Z
I was surprised too. If someone wants to do an econometric study of, say, the relationship between M1 and inflation then they'll need a dummy variable for that change.
Daniel
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2023-11-11T13:39:30.730Z
2023-11-11T13:39:30.730Z
Daniel
<p>Certainly not to the people. Seems whoever got it used it to acquire real estate, which would explain why homes doubled recently, and the average person can't afford one anymore.</p>

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2023-11-10T19:01:54.610Z
Well, quantitative measures mostly benefit the top .1%.  Money slowly trickles down (if at all).  I hate to make this political but you can blame Republicans for most of this.  They are constantly lowering taxes on the wealthy and reducing expenditure for the bottom 80%.  Yet millions of Americans still vote for them evidenced by the fact that Republicans control Congress.
QuietInMontana
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2023-11-10T19:06:17.427Z
Makes me wonder.  Should Democrat politicians just lie to them and then do what's right for them?  For example, should they say that Christianity belongs in schools and government even though they do not believe so and will not change laws in accordance?  Right now, Republicans make false promises that hurt their constituents.  At least, Democrats would be making false promises that benefit the populace.  I'm being half-facetious and half-serious.
QuietInMontana
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2023-11-09T18:55:23.443Z
2023-11-09T18:55:23.443Z
user45574
<p>The money supply went from about \$4 trillion in 2020 to about $20 trillion today.  Where did all that money go?</p>
<p>When the money supply went from about \$1.4 trillion to about $1.7 trillion, I was worried.  But, due to the Great Recession, I can understand how it would be necessary.  Combined with all that fiscal spending, I reasoned that the economy was able to &quot;absorb&quot; the extra money supply.  I speculated that all the extra cash eventually ended up being traded back and forth among the top .1%.  Thus, the increase in stock valuations.</p>
<p>But, as the economy recovered, the Fed is supposed to take money back out of the economy, no?</p>
<p>And, now that the money supply is at astronomical amounts but without meaningful inflation (the 8% can be attributed to supply-chain issues), where did the money end up?</p>
<p>What are the possibilities of runaway inflation?</p>

CC BY-SA 4.0
2023-05-23T18:51:26.417Z
what exactly you mean by where the money went? If you mean what individuals or organizations, or just even industries hold it that is impossible to figure out as there are no data for that. Also, where is your source for 8% being attributable to supply side issues? According to best data we have about 1/3 of US inflation is demand driven https://oecdecoscope.blog/2023/02/14/if-its-not-one-thing-its-another-supply-and-demand-factors-driving-rising-inflation/
1muflon1
CC BY-SA 4.0
2023-05-24T05:10:32.483Z
I meant where the money went conceptually as a thought exercise.  When the Fed increased the money supply, money flowed into banks and then into specific areas of the economy.  Given that the amount of cash literally more than quadrupled, why didn't massive inflation occur?  And, is this the reason why the Phillips Curve no longer is valid?  Where did all the money go?
QuietInMontana
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2023-11-11T15:04:32.500Z
Re: "\$4 trillion in 2020 to about \$20 trillion today" - where did you get those figures from? What type of money is that referring to?
Mick
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2023-11-11T16:03:24.760Z
@Mick It's M1.  You can find the numbers everywhere.  Here's [one](https://www.ceicdata.com/en/indicator/united-states/money-supply-m1).  Funny how this question aged well as inflation recently  spiked.
QuietInMontana
CC BY-SA 4.0
2023-11-11T16:04:32.927Z
@Mick However, this inflation should be temporary though as long as Biden reins in his spending.  We also need to seriously start taxing the .1% to rake back the heavy supply of dollars.  I know very little inflation history, but inflation might trigger people to distrust the dollar and start investing recklessly.  It may cause undue pressure and stress on people and the economy.
QuietInMontana
<inflation><money-supply><quantitative-easing>
Where did the money supply go?
QuietInMontana
# Where did the money supply go?

(Asked by: username_0 on 2023-05-23)

The money supply went from about \$4 trillion in 2020 to about $20 trillion today. Where did all that money go?

When the money supply went from about \$1.4 trillion to about $1.7 trillion, I was worried. But, due to the Great Recession, I can understand how it would be necessary. Combined with all that fiscal spending, I reasoned that the economy was able to "absorb" the extra money supply. I speculated that all the extra cash eventually ended up being traded back and forth among the top .1%. Thus, the increase in stock valuations.

But, as the economy recovered, the Fed is supposed to take money back out of the economy, no?

And, now that the money supply is at astronomical amounts but without meaningful inflation (the 8% can be attributed to supply-chain issues), where did the money end up?

What are the possibilities of runaway inflation?

**Tags:** inflation, money-supply, quantitative-easing
> **Comments:**
> **username_1**: what exactly you mean by where the money went? If you mean what individuals or organizations, or just even industries hold it that is impossible to figure out as there are no data for that. Also, where is your source for 8% being attributable to supply side issues? According to best data we have about 1/3 of US inflation is demand driven https://oecdecoscope.blog/2023/02/14/if-its-not-one-thing-its-another-supply-and-demand-factors-driving-rising-inflation/  
> **username_0**: I meant where the money went conceptually as a thought exercise.  When the Fed increased the money supply, money flowed into banks and then into specific areas of the economy.  Given that the amount of cash literally more than quadrupled, why didn't massive inflation occur?  And, is this the reason why the Phillips Curve no longer is valid?  Where did all the money go?  
> **username_2**: Re: "\$4 trillion in 2020 to about \$20 trillion today" - where did you get those figures from? What type of money is that referring to?  
> **username_0**: @Mick It's M1.  You can find the numbers everywhere.  Here's [one](https://www.ceicdata.com/en/indicator/united-states/money-supply-m1).  Funny how this question aged well as inflation recently  spiked.  
> **username_0**: @Mick However, this inflation should be temporary though as long as Biden reins in his spending.  We also need to seriously start taxing the .1% to rake back the heavy supply of dollars.  I know very little inflation history, but inflation might trigger people to distrust the dollar and start investing recklessly.  It may cause undue pressure and stress on people and the economy.  

---

## 2 answers

### Answer by username_3 on 2023-11-11. Score: 1

The Fed began including savings deposits in M1 in May 2020. See [Technical Q&As](https://www.federalreserve.gov/releases/h6/h6_technical_qa.htm), specifically the items posted on 12/17/2020.

> **Comments:**
> **username_0**: Thanks for your helpful info.  That's an important fact, but it might not be relevant here.  Even if M1 was changed to include savings (which seems like the right move), wouldn't historical M1 numbers be adjusted accordingly (aka normalized)?  In other words, charts would still accurately depict a drastic change.  
> **username_3**: Actually they didn't adjust the historical numbers because the regulations for savings deposits were different before May 2020. But you could probably find historical data for savings accounts (as part of M2) and generate a pseudo-M1 history.  
> **username_0**: I'm not saying you're wrong but it's so hard to believe the data guys would have overlooked this.  I agree that the regulations would be different before May 2020, but I can't believe they wouldn't recalculate previous years based on the new regulation.  Normalizing is usually the first thing statisticians do.  
> **username_3**: I was surprised too. If someone wants to do an econometric study of, say, the relationship between M1 and inflation then they'll need a dummy variable for that change.  

---

### Answer by username_4 on 2023-11-09. Score: 0

Certainly not to the people. Seems whoever got it used it to acquire real estate, which would explain why homes doubled recently, and the average person can't afford one anymore.

> **Comments:**
> **username_0**: Well, quantitative measures mostly benefit the top .1%.  Money slowly trickles down (if at all).  I hate to make this political but you can blame Republicans for most of this.  They are constantly lowering taxes on the wealthy and reducing expenditure for the bottom 80%.  Yet millions of Americans still vote for them evidenced by the fact that Republicans control Congress.  
> **username_0**: Makes me wonder.  Should Democrat politicians just lie to them and then do what's right for them?  For example, should they say that Christianity belongs in schools and government even though they do not believe so and will not change laws in accordance?  Right now, Republicans make false promises that hurt their constituents.  At least, Democrats would be making false promises that benefit the populace.  I'm being half-facetious and half-serious.  

---

