Currency In Circulation

When you love money so much that it's pumping through the bloodstream, circulating from your head to your toes.

Or...all of the money that has ever been issued into a nation’s financial system, less the amount of money extracted by a nation’s central bank or placed into financial institutions.

While the first sounds like a crazy episode of South Park, the latter is the story behind currency in circulation. The St. Louis Fed tracks all the U.S. currency that is floating around the universe (mostly on Earth), and counts both paper and coin currencies.

A lot of this money could be circulating as a way to finance the payment of goods and services. And a small amount of it could be stored in the walls of your crazy uncle’s house, because he doesn’t trust banks. It’s just important to know that the more money that gets tied up in banks or long-term investments, or finds its way out of circulation...the less capital is available to shore up short-term debts, or to finance consumption. It's important not just to near-term economic growth, but it can also create liquidity problems for an economy.