What is M1 Money Today in the USA?

"The process by which banks create money is so simple that the mind is repelled." John K. Galbraith, 1975, Money: Whence it came, where it went.




By Alan Myers


M1 Money is Money that individuals and their businesses spend to get the goods and services they want or need right now. Basically, M1 Money is all the cash and coin we have in our pockets, purses and wallets and all the electronic digits in all of our checking accounts. That’s Money and only people have Money.


The M1 Money Supply is the supply of Money that includes the most liquid components of our national money supply. That is to say, M1 Money is Money that can be accessed immediately and used on demand.


According to the Federal Reserve System (Fed) and economists, the M1 Money supply includes all the cash (ca) and coin (co) in circulation, all traveler’s checks (tc) issued by non-banks and all the “Money” that is represented by all the electronic digits (ed) in all the checking accounts and Negotiable Order of Withdrawal (NOW) accounts.

Other names used to describe a checking account include, demand deposit account or transaction account. Another name for M1ed Money is checkbook money. Another name for M1ca Money is pocketbook money.

In the United States, a NOW account is an interest bearing checking account that allows the account holder to write an unlimited number of checks on the NOW account. Thought this is rarely done, the bank or credit union has the right to require at least seven days written notice prior to a withdrawal from a NOW account.

Another way to visualize what is included in the total M1 Money supply is:

M1 Total= M1ed + M1ca + M1co + M1tc

  1. M1ed, or all the electronic digit money in all the checking and NOW accounts;
  2. M1ca, or all the paper money in circulation;
  3. M1co, or all the metal coin money in circulation; and
  4. M1tc, or all the traveler’s checks issued by non-banks, a very small% of

The Take Away – In our Fed controlled monetary system, the single most prevalent form of Money in the M1 Money Supply is M1ed. The importance of this fact will become very clear in the next two modules.


Alan Myers is a San Diego CPA and forensic accountant.  For 8 years, he has dedicated himself to researching, studying and analyzing the Federal Reserve System, banking and the national debt.  He is a writer, speaker and radio commentator on these and other related topics.  You can contact Alan at: Alan Myers, CPA amcpa53@gmail.com

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2 Responses to What is M1 Money Today in the USA?

  1. Hannah Gonzalez November 26, 2018 at 12:22 pm

    Excited for where this is going!

  2. Al October 8, 2018 at 12:17 pm

    Fantastic read. Wasn’t expecting a thorough explanation …but this is a great way to learn about the monetary system.


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