Monetary data for Australia
The following sets of data were extracted from the RBA website. They reveal that, over a twenty-year period, the ratio of the volume of base money (MB) to the various other monetary aggregates varied only slightly, despite the fact that the aggregates increased over that time by factors ranging from 3-6.
What this means is that base money in Australia (mostly currency – coins and notes) has increased in tandem with the increase in bank credit money. The extent to which the volume of base money exceeds the volume of currency in the economy measures the magnitude of the exchange settlement funds, which is nothing more than a fancy description of the net deposits that banking institutions hold within their RBA accounts.
The fact that the MB/currency ratio in 2010 was unchanged from its 2005 value shows that the global financial crisis had little impact upon Australia, to the extent that the RBA felt no need to flood the banking system with creditary base money, as happened in the U.S. The reason was the decision by the government to use the fiscal tools available to it, rather than rely on monetary tools (which operate far more slowly, if at all) to counter the effects of the GFC.
Data obtained from the RBA website (seasonally adjusted)
Increase in magnitude from June 1990 to June 2010
|Mb (broad money)||3.03|
The distribution of transaction money (in $billions) at June 2011 was:
|Notes in circulation||45.0|
|Notes in banks||5.1|
|Coins in circulation||3.1|
|Coins in banks||0.4|