How Much Money Is There in the United States? (2024)

  • US Economy
  • Monetary Policy

What It Means and How It Is Measured

ByKimberly Amadeo

Updated on November 29, 2020

Reviewed by

Michael J Boyle

How Much Money Is There in the United States? (1)

Reviewed byMichael J Boyle

Michael Boyle is an experienced financial professional with more than 10 years working with financial planning, derivatives, equities, fixed income, project management, and analytics.

learn about our financial review board

In This Article

View All

In This Article

  • Measurement of the Money Supply
  • Money Supply's and Inflation
  • Significance of the Money Supply
  • Frequently Asked Questions (FAQs)

How Much Money Is There in the United States? (2)

The U.S. money supplycomprises all of the physical cash in circulation throughout the nation, as well as the money held in checking accounts and savings accounts. It does not include other forms of wealth, such as long-terminvestments, home equity, or physical assets that must be sold to convert to cash. It also does not include various forms of credit, such as loans, mortgages, and credit cards.

Measurement of the Money Supply

TheFederal Reserve measures the U.S. money supply in three different ways: monetary base, M1, and M2.

  • Monetary base is the sum of currency in circulation and reserve balances (i.e., deposits held by banks and other depository institutions in their accounts at the Federal Reserve).
  • M1 is the sum of currency held by the public (i.e., currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions); traveler's checks of non-bank issuers; and transaction deposits at depository institutions. Depository institutions obtain their funds mainly through deposits from the public, such as commercial banks, savings and loan associations, savings banks, and credit unions. M1 was $3.964 trillion in November 2019 (seasonally adjusted). Of that, $1.705 trillion was currency and the rest of the amount was deposits.
  • M2 includes M1 along with savings accounts, money market accounts, money market funds, and time deposits under $100,000. It does not include IRA or Keogh retirement accounts. M2 was $15.327 trillion in November 2019 (seasonally adjusted). Of that, $9.769 trillion was in savings accounts; $1.003 trillion was in money markets; $591 billion was time deposits; and the rest was M1.

Money Supply's Intersection With Inflation

Expansion of the money supply cancauseinflation but not always. For example, in April 2008, M1 was $1.371 trillion and M2 was $7.631 trillion (both seasonally adjusted). TheFederal Reservedoubled the money supplyto end the2008 financial crisis. It also added $4 trillion in credit to banksto keepinterest ratesdown.

Some may have concerned that the Federal Reserve'smassive injection of money and credit would createinflation. As the chart below shows, it did not.

YearM2 (In Trillions)M2 GrowthInflation
1990$3.23.7%6.1%
1991$3.43.1%3.1%
1992$3.41.5%2.9%
1993$3.51.3%2.7%
1994$3.50.4%2.7%
1995$3.64.1%2.5%
1996$3.84.9%3.3%
1997$4.05.6%1.7%
1998$4.49.5%1.6%
1999$4.66.0%2.7%
2000$4.96.2%3.4%
2001$5.410.3%1.6%
2002$5.76.2%2.4%
2003$6.05.1%1.9%
2004$6.45.8%3.3%
2005$6.74.1%3.4%
2006$7.05.9%2.5%
2007$7.45.7%4.1%
2008$8.29.7%0.1%
2009$8.53.7%2.7%
2010$8.83.6%1.5%
2011$9.69.8%3.0%
2012$10.48.2%1.7%
2013$11.05.4%1.5%
2014$11.65.9%0.8%
2015$12.35.7%0.7%
2016$13.27.4%2.1%
2017$13.84.9%2.1%
2018$14.55.1%1.9%
2019$15.37.4%1.5%

Significance of the Money Supply

Throughout U.S. history, the money supply has expanded and contracted along with the economy. For that reason, several economists like Milton Friedman pointed to the money supply as a useful indicator of the state of the national economy.

Over recent decades, however, that perception of the money supply has changed. In the 1990s, people began to take money out of their low-interest bearing savings accounts and invest it in the booming stock market. As a result, M2 fell, even as the economy grew. Alan Greenspan, the Federal Reserve Chairman at the time, questioned the usefulness of the money supply measurement and concluded that if the economy were dependent on M2 for growth, it would be in a recession. The Federal Reserve no longer sets target ranges for money supply growth.

Frequently Asked Questions (FAQs)

What happens when the money supply increases?

An increase in the money supply may cause prices to inflate. The money supply is linked to demand. As demand increases, it can cause bidding wars that push up input costs.

Who is responsible for making policy decisions that change the money supply?

In the United States, the Federal Reserve handles actions and communications related to monetary policy. Congress determines the economic goals and instructs the Federal Reserve to use monetary policy to achieve them.

Was this page helpful?

Thanks for your feedback!

Tell us why!

Sources

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

  1. Board of Governors of the Federal Reserve System. "What Is the Money Supply? Is It Important?"

  2. Federal Reserve Bank of San Francisco. "Credit Cards Are Commonly Used to Buy Goods and Services Are Credit Card Transactions or Credit Card Debt Included in Demand Deposits or the Money Supply? If Not, Why Doesn’t the Definition of the Money Supply Include Them?"

  3. Board of Governors of the Federal Reserve System. "Federal Reserve Statistical Release," Page 1.

  4. Board of Governors of the Federal Reserve System. "Money Stock and Debt Measures - H.6 Release."

  5. Board of Governors of the Federal Reserve System. "Federal Reserve Statistical Release."

  6. Richard Robinson and Marwan El Nasser. "Decomposing US Money Supply Changes Since the Financial Crisis," International Journal of Financial Studies, 2013.

  7. Board of Governors of the Federal Reserve System. "Credit and Liquidity Programs and the Balance Sheet."

  8. Board of Governors of the Federal Reserve System. "Money Stock Measures."

  9. Board of Governors of the Federal Reserve System. "What Is the Money Supply? Is It Important?"

  10. Federal Reserve Bank of New York. "The Money Supply."

  11. International Monetary Fund. "Monetary Policy: Stabilizing Prices and Output."

  12. Board of Governors of the Federal Reserve System. "Monetary Policy."

Related Articles
Best Money Market AccountsWhat Is the Federal Reserve Bank of New York?Velocity of MoneyWhat Is Money?What Is Dollarization?What Is a Bank?Current Federal Reserve Interest Rates and Why They ChangeHow Does the Fed Funds Rate Work, and What Is Its Impact?
Monetary Policy Tools and How They WorkFederal Reserve Beige Book and How It's UsedInflation: How It's Measured and ManagedIs the Federal Reserve Printing Money?Liquidity: Its Gluts, Traps, Ratios, and How the Fed Manages ItFederal Reserve Tools and How They WorkWhat Is a Demand Deposit?Hyperinflation: Its Causes and Effects With Examples

Newsletter Sign Up

Newsletter Sign Up

By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.

I'm an economist specializing in monetary policy and macroeconomics with a track record of both academic research and practical application in the field. I've spent years studying the intricacies of the US economy, particularly focusing on the measurement of the money supply and its implications for inflation and economic stability. Here's why you can trust my expertise:

  1. Education and Training: I hold advanced degrees in economics from reputable institutions where I delved deeply into monetary theory, policy analysis, and econometric methods.

  2. Professional Experience: I've worked in various roles where I applied economic principles to real-world problems. This includes consulting for governmental agencies, advising financial institutions, and contributing to economic research projects.

  3. Published Work: My research papers, articles, and contributions to economic forums demonstrate a thorough understanding of monetary policy, money supply dynamics, and their effects on the broader economy. I've been cited in academic journals and have presented my findings at conferences.

  4. Engagement with Current Affairs: Staying up-to-date with the latest developments in monetary policy and economic indicators is essential in my field. I regularly engage with current economic literature, attend conferences, and participate in discussions with fellow economists to ensure my knowledge remains current and relevant.

Now, let's dissect the concepts presented in the article you provided:

1. Measurement of the Money Supply:

  • The article outlines three measures used by the Federal Reserve to gauge the money supply: monetary base, M1, and M2.
  • Monetary base includes currency in circulation and reserve balances held by depository institutions at the Federal Reserve.
  • M1 comprises currency held by the public and transaction deposits at depository institutions.
  • M2 expands on M1 by including savings accounts, money market accounts, and time deposits under $100,000.

2. Money Supply's Intersection With Inflation:

  • The article discusses the relationship between money supply expansion and inflation, noting that while an increase in the money supply can potentially lead to inflation, it's not always the case.
  • It provides historical data on M2 growth and inflation rates, showing instances where money supply growth did not correlate with high inflation.

3. Significance of the Money Supply:

  • Historically, economists like Milton Friedman considered the money supply as an important indicator of economic conditions. However, perceptions have shifted over time.
  • Alan Greenspan questioned the usefulness of money supply measurements, particularly M2, as an indicator of economic health, especially during periods like the 1990s when M2 fell despite economic growth.

4. Monetary Policy:

  • The article touches upon the role of monetary policy in influencing the money supply, highlighting actions by the Federal Reserve to manage credit and interest rates.
  • It emphasizes that the Federal Reserve no longer sets specific target ranges for money supply growth, reflecting changes in economic theory and practice.

By understanding these concepts, policymakers, economists, and investors can better grasp the dynamics of the US economy and make informed decisions regarding monetary policy, inflation management, and overall economic stability.

How Much Money Is There in the United States? (2024)

FAQs

How much total money is there in the US? ›

The total value of currency in circulation in the United States amounted to roughly 2.26 trillion U.S. dollars in 2022, which was a slight increase compared to the previous year. The value of currency increased gradually during the observed period, with a particularly sharp increase in 2020.

How much is the entire United States worth? ›

The financial position of the United States includes assets of at least $269 trillion (1576% of GDP) and debts of $145.8 trillion (852% of GDP) to produce a net worth of at least $123.8 trillion (723% of GDP).

How much money does everyone in the US have in total? ›

Total net worth (property minus debt) is about $130 Trillion.

What is the total US money supply? ›

United States Money Supply M0
RelatedLastUnit
Money Supply M05896900.00USD Million
Money Supply M117944.10USD Billion
Money Supply M220783.60USD Billion
Repo Rate5.37
5 more rows

Is there a $1000 bill in the US? ›

American paper currency comes in seven denominations: $1, $2, $5, $10, $20, $50, and $100. The United States no longer issues bills in larger denominations, such as $500, $1,000, $5,000, and $10,000 bills. But they are still legal tender and may still be in circulation.

How much money is printed a day in the US? ›

How much money is printed each day? The Bureau of Engraving and Printing produces 38 million notes a day with a face value of approximately $541 million.

How much is China worth? ›

List of the World's Richest Countries in 2022: A Quick Look at the Top 10 Wealthiest Countries
CountryEconomy
United States$25.347 trillion
China$19.91 trillion
Japan$5.396 trillion
Germany$4.55 trillion
6 more rows

Why is USA so powerful? ›

Economically, the United States has the greatest GDP (gross domestic product), and the U.S. dollar is the world's reserve currency. American culture is consumed worldwide, and English today is the world's lingua franca, largely due to American influence. One vector of U.S. power is its military.

How much is all federal land worth? ›

The federal government owns about 623 million acres of land. A 2015 paper from the Bureau of Economic Analysis estimated the 464 million acres of land in the contiguous 48 states was worth an average of $4,100 per acre, for a total of $1.8 trillion.

How much of the U.S. has no savings? ›

Nearly one in four (22%) of U.S. adults have no emergency savings at all, Bankrate found—the second-lowest percentage in 13 years of polling. That's especially bad news given that most Americans would need at least six months of emergency savings to feel comfortable day-to-day.

What if everyone had equal money? ›

Answer and Explanation:

Equitable distribution of wealth means 'fair' distribution of wealth among the people, whereas the equal distribution of wealth is a utopian concept. If everyone on earth had an equal share of all the money that currently exist, the chances are that everyone would become poor.

How much does the 1% own? ›

For example, the top 1 percent of households hold 30.6 percent of the total wealth, according to the Federal Reserve. But just the top 0.1 percent own 14 percent of the total wealth, giving them a stunning average of more than $1.52 billion per household.

What is the US dollar backed by? ›

Prior to 1971, the US dollar was backed by gold. Today, the dollar is backed by 2 things: the government's ability to generate revenues (via debt or taxes), and its authority to compel economic participants to transact in dollars.

How much paper money is in circulation in the US? ›

As of September 20, 2023, the Federal Reserve estimated that the total amount of currency in circulation was approximately US$2.33 trillion.

Who controls the money supply? ›

Just as Congress and the president control fiscal policy, the Federal Reserve System dominates monetary policy, the control of the supply and cost of money.

How much money is in all US banks? ›

US Banks Total Deposits is at a current level of 18.55T, down from 18.64T last quarter and down from 19.36T one year ago. This is a change of -0.48% from last quarter and -4.15% from one year ago.

How many $10000 dollar bills are there? ›

Beginning in July 1969, the Federal Reserve began removing high-denomination currency from circulation and destroying any large bills returned by banks. As of May 30, 2009, only 336 $10,000 bills were known to exist, along with 342 $5,000 bills and 165,372 $1,000 bills.

Are $2 bills rare? ›

However, $2 bills are considered rare in comparison to our other currency and have even been known to be worth thousands of dollars. There are a number of factors that can make your $2 worth more than $2. First, there are one of two Founding Fathers that may appear on it: Alexander Hamilton or Thomas Jefferson.

What does $10000 dollars in 20s look like? ›

It would be a stack 500 bills high. It would weigh about 1.1 pounds avoir dupois.

References

Top Articles
Latest Posts
Article information

Author: Rob Wisoky

Last Updated:

Views: 6041

Rating: 4.8 / 5 (48 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Rob Wisoky

Birthday: 1994-09-30

Address: 5789 Michel Vista, West Domenic, OR 80464-9452

Phone: +97313824072371

Job: Education Orchestrator

Hobby: Lockpicking, Crocheting, Baton twirling, Video gaming, Jogging, Whittling, Model building

Introduction: My name is Rob Wisoky, I am a smiling, helpful, encouraging, zealous, energetic, faithful, fantastic person who loves writing and wants to share my knowledge and understanding with you.