The 'money supply' of the United States of America
First let's start with the simple distinctions.
• Everything on the charts above is someone's principal debt to someone else.
RED = the total reported principal debt (98 Trillion) - debt to banks as well as to non-bank lenders of all kinds.
This is reported debt. The real total is an unknown and logically must be larger.
https://fred.stlouisfed.org/series/TCMDO/
GREEN = debt to banks - M2 being the total debt to banks.
https://fred.stlouisfed.org/series/M2REAL
Debt to banks M2 is all the money that exists (7.2 Trillion).
Therefore, all payments being made in the red area depend on the existence of available money created in the green area.
To repeat and emphasize,
ALL of the money in the green area was created as someone's principal debt to a bank.
VERY DARK GREEN = cash in the hands of the public (2.3 Trillion)
Cash is created as principal debt to the central bank and is available to the public.
https://fred.stlouisfed.org/series/WCURRNS
BRIGHT GREEN = so-called "reserves" - credit for cash on demand from the central bank which currently is only available to retail banks.
Both used to be created by the central bank buying bonds (taxpayer debt) issued by the national government.
Since "quantitative easing" was initiated, central banks have also created reserves to buy non-governmental bonds as well.
https://fred.stlouisfed.org/series/BOGMBASE
PALE GREEN, M1 includes the previous 2 and adds the balances in checking accounts. These are assumed to be available to be earned.
However, because the BRIGHT GREEN is not available to the public, it's addition to M1 should be subtracted for this comparison
Therefore, the BLACK LINE more accurately indicates the maximum amount of money possibly available to be earned (5 Trillion
https://fred.stlouisfed.org/series/CURRDD
LIGHT GREY-GREEN M2 includes the previous 3 with the addition of savings.
Savings are not available to the public unless lent by the depositor (a non-bank).
The total principal debt adds the debts to non-bank lenders that are reported to the Federal Reserve.
All debts shown above in RED are principal debts of already existing money.
Therefore, they are all concurrent and dependent on recycling the same money to make payments as the principal debts to banks.
A principal payment to a bank extinguishes that money.
Currently, more than 98 / 5 = 19.6 principal debts of a dollar depend on recycling each single dollar of bank credit.
Therefore, the elimination of ONE DOLLAR of bank credit leaves, at the very least,
98/5 = 19.6 dollars of dependent loans and all other payments without any money with which to pay them.
In 2008, the Big Crash occured when that same number hit 23.