What’s the difference between adjusted monetary base and currency in circulation?
December 27, 2009 by Currency Trading Tips
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Can you answer nathan_inks’s question about Currency Trading?:
What’s the difference between adjusted monetary base and currency in circulation?
What’s the difference between adjusted monetary base and currency in circulation?
These are 2 charts from the Federal Reserve that are pretty much identical right until the end, so why is there such a huge difference?
http://research.stlouisfed.org/fred2/series/CURRCIR?cid=342
http://research.stlouisfed.org/fred2/series/AMBNS
I think it’s because the bailout money was given to companies not in printed form, but electronically (or traded from the Federal Reserve to the companies’ banks), so it’s there’s more money out there, it’s just not in circulation.
Am I understanding this right or not?
Forex Trading Strategies
Currency Trading Feedback: The adjusted base is the sum of reserve accounts of financial institutions at Federal Reserve Banks, currency in circulation (currency held by the public and in the vaults of depository institutions).
The value shot up when the Fed started paying interest on the reserve accounts held at Federal Reserve Banks (around the beginning of October). The spike occurred before the bailout money got to the banks.