seems everything is fine…
There can be no doubt that besides the regular types of the circulating medium ….there exist still other forms of media of exchange which occasionally or permanently do the service of money.
http://ftalphaville.ft.com/blog/2009/12/01/86211/hayek-on-elastic-money/
We update our estimates and analysis of the “shadow money stock” in the US. Direct bank lending only accounts for about half of total private credit, which means that incorporating shadow money and credit into traditional analysis is absolutely essential in assessing inflation and deflation risks.
We draw four main conclusions:
First, there is absolutely NO evidence that the unprecedented increase in public deficits and the Fed’s balance sheet has yet created an inflationary overhang of excess liquidity. The effective money stock (M2 plus shadow money) has grown only 2.5% p.a. since February 2007.
Second, restoring funding liquidity to the financial system was the right thing to do, and has almost certainly prevented a deflationary disaster.
Third, just as the devastating wholesale funding run on the shadow banking system prefigured a collapse in commercial bank willingness to lend, it is now leading the way in restoring credit availability to markets and the economy. Effective money growth has accelerated in the last 6 months.
Fourth, huge volatility in the oil price over the past 18 months have led to much larger swings in the effective money stock measured in real terms. Equity prices and production have mirrored those swings quite closely. Going forward, we expect somewhat slower real growth in effective money.
http://ftalphaville.ft.com/blog/2009/12/01/86216/no-fuel-for-inflation/