Questions about money supply

The money supply measures reflect the different degrees of liquidity—or spendability—that different types of money have. The narrowest measure, M1, is restricted to the most liquid forms of money; it consists of currency in the hands of the public; travelers checks; demand deposits, and other deposits against which checks can be written. M2 includes M1, plus savings accounts, time deposits of under $100,000, and balances in retail money market mutual funds.

The M1 component is widely held as a store of value.  Some of it is in use in countries like Ecuador.  Singaporeans import large numbers of dollars.  How much of it is domestically held?

Further, US residents may hold dollar deposits in London banks, Deutsche Marks in Frankfurt, deposits which can be brought to bear on money demand in a moment’s notice.  Money sitting which can become money on the wing in a moment.  This component appears nowhere in the monetary aggregates defined above.


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