Also, previously illiquid assets and loans can be pooled and securitized into liquid bond-type instruments that can quickly be made liquid and turned into money. Large companies, of course, have long directly issued their own commercial paper, another form of credit that can quickly be converted into money. Once again, the Internet is more important that the Fed. Rather than money supply numbers, real world market prices such as gold, dollar exchange rates, and Treasury bond rates and spreads are better indicators of excess money, money value and future inflation. But money still matters, though you wouldn't know it from recent Fed policy announcements.
Inflation is a monetary phenomenon.
Right now the Y2K threat is affecting money. More to be revealed. Send your comments about his column by clicking here.