Everyone is a Fed expert & knows if it is an inherently good or bad institution. Slinging around regurgitated talking-points learned by reading @ BlueCheck's TWTR Fed thread.

Let's take a step back here people, relax, & put learning ahead of self-promotion and ur fragile egos.

Have you wondered if the M1 money supply is subtractive or accumulative?

In other words, when money is paid out of a checking account and put into a savings account, it increases M2, but have you asked yourselves: Does it remain as part of M1 or is it subtracted from it?

U may think that when money is moved from a checking account to a savings account, it is subtracted from M1. Otherwise, M1 would be double counted when the transferred M2 money moves back to M1. If you've reached this level of thinking ur doing better than 95% of TWTR Fed experts

Now for the next level, where u realize ur prior thesis poses a serious logical flaw. How can M1 be reduced when moved to M2? When money is moved from checking to savings or any other investment it does not disappear into a vault. That money is spent on an investment project.

It is given to a contractor or employee and reappears in their checking accounts where it becomes part of M1 again. It would seem, therefore, that it doesn't really leave M1 at all. It merely increases M2.

Who can solve this paradox?

How does the Fed account for M1 money supply? Is the the M1 money supply subtractive or accumulative?

Everyone is a Fed expert until they get punched in the face with a real question challenging their tertiary-level academic thinking.

Welcome to the dojo of higher thinking.

cc: @mark_dow @TheStalwart