US Money Supply Growth October 2008 – By Component

As mentioned in Money Supply October 2008, the money supply has grown by $150 billion or 8% from October 2007 through October 2008.

Upon request, I am listing the contribution of each money supply component to this growth:


Click image to enlarge.

Based on this chart, the most significant contribution to this growth has been in domestic private and business checking accounts ($85.3 billion or 57%), which needs to be calculated by adding up retail sweeps and demand deposits, followed by a growth of $29 billion or 19% in cash and an equal amount in government deposits at the Federal Reserve.

The contribution of government deposits at commercial banks, government note balances at repositories, and deposits of foreign banks and institutions has been negligible.

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Money Supply – September 2008

The final money supply data for September indicates that the US money supply did not grow as much as we expected based on data provided during the month of September. The annual growth has barely exceeded 3%. It has grown to $1.93 trillion. However, the deflationary tendency cannot yet be considered as broken, further corrections in asset, commodity, consumer prices and a further strengthening of the dollar can be expected, unless the money supply growth once again increases this month.

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