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Mises Institute - Fed is Underreporting Inflation

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The Mises institute is reporting that the fed is under reporting the current money supply (M1) by a substantial amount. The reported M1 is 1.6 Trillian which would be 16% over last year.
The actual M1 figure is 2.34 trillion which would represent an increase of 70 %. The M1 is a key indicator of inflation.

This fiscal slight of hand is largely being based on the misrepresentation of demand deposits (read checking accounts and other short term accounts) as time deposits which represents savings accounts with a minimum 90 days retention (such as a 90 day or longer CD). As the article explains

Because of these differences, economists, for many centuries, have classified demand deposits as money but have said that time deposits are not money. A simple example will illustrate the point. Money is that economic good which can be used to buy things. Suppose you go to the store and see an item that you want. If you pull out your checkbook, which is a demand deposit, it will be accepted as money. But if you pull out your passbook to the savings account, then you will politely be told to take the passbook to the bank and get money for it. The passbook is not money (because of the time restriction on it), and you cannot buy things with it.

The St Louis Fed had this to say about the discrepancy.

In retail deposit sweeping, banks reclassify checkable deposits as savings deposits so as to reduce statutory reserve requirements. Within certain legal bounds, such behavior is acceptable to the Fed. Bank customers are unaware that such reclassification is occurring.

So to be clear, the Fed requires banks reserve a certain amount of cash on hand in the form of time deposits (money not easily withdraw-able) to prevent the possibility of a bank run or outright insolvency, but it accepts a certain amount of lies when banks are reporting this figure.

Now the lies represent an increase of 70% in the actual supply of money. Since this figure is being misreported, the true consequences of that large a monetary base (read rampant inflation) have not really caught up with us yet.