it's important to know the difference between M1, M2, M3 etc. https://t.co/o1Xand3Q0Q
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5/ but you don't want to call that Mx, for any x, because the M stands for MONEY and that tells us that what we're specifically interested in is units of exchange, NOT units of productivity.
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6/ and if the topic is inflation (as it almost always is, if someone is upset about M1 or M2), then we specifically want to call out M as DISTINCT from the things of real value, bc it's the change in the ratio of those two that's suggestive of inflation
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7/ but anyway, getting back to the top of the thread: M1 shooting up an important thing to think about is where is that cash going? A very large percent of US currency circulates overseas (something like 40%, IRRC). But that's on average. Given craziness worldwide, I could
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8/ imagine that households in the PRC are more interested in hoarding gold and US dollars than before. So of the NEW M1 that's been printed recently, is 40% going overseas ... or is it higher? 80% wouldn't surprise me.
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9/ On a tangent, seignorage (USG ability to turn worthless ink and paper into $$$$) is amazing. 40% of $6T in currency is overseas, or ~$2T what a glorious scam - foreigners purchased that paper with $2T of REAL THINGS. [ not really a scam, of course ; USN pays those checks ]
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