According to the Austrian viewpoint, time deposits are not inflationary. They subtract time deposits (CDs) from M2 to get MZM.
This is incorrect, because I can purchase a money market fund, which in turn purchases short-term CDs. I have a “demand deposit”, but the CD doesn’t count towards MZM.
Also, MZM excludes CDs over $100,000, which reflect institutional investors.
I don’t respect MZM, because MZM = M2 minus time deposits. I consider M3-M2 to be the most interesting part of inflation, which MZM ignores.
I think that if anyone had the answer to that question they would have enough money to hire Warren Buffet as their dog walker…
The fine and generous folks that run this site have provided the True Money Supply numbers (also known as the Austrian Money Supply) for your viewing pleasure.
Here’s an article that goes into this as well as addresses the predictive nature of an accurate money supply count. Just kind of skimmed over it though so can’t really comment, plan on reading it after I post this.
My personal opinion is that the AMS should also include sweeps data as they are really checkable deposits that get moved into a non-demand deposit account to bypass reserve requirements according to computer algorythims that determine how likely it is for a customer to withdraw money at a certain time.
But the whole sweeps thing is a bit confusing to me so I’m not sure how to go about doing that to get truly accurate numbers.