If you own a ‘$100 Citibank deposit’, you’ve got $100, right? Wrong, sorry, you don’t. A claim upon something is different from the thing itself. So, a claim upon a dollar is different from a dollar itself. This – of course – seems patently obvious, even so, I contend that the implications are interesting (particularly for the contrarian investor). If we revisit my favourite analogy; money is to profit-seeking individuals as the sea is to fish, then it should be clear that such implications are – in fact – significant for most people.


Here, I dissect the money supply into – broadly – federal reserve notes & reserve balances and ‘IOU Money’. I consider the investment implications of current trends in these components of the money supply.

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