Today, an article by Ellen Brown ("The Retreat of Shadow Lenders: Why Deflation, Not Inflation, Is The Order Of The Day") appeared in Le Metropole Cafe. As usual, it was provocative and interesting. But it left me questioning whether it mixed concepts of notional money and currency, and it left me confused. Those who have read the article could perhaps help me. In the article is she, in fact, mixing the concepts of notional money and actual dollars printed (currency)? If so, the current Fed crusade results in the replacing of the notional dollars "destroyed" during the recent crisis with actual currency (hundreds of trillions with a few trillion initially). If so we have a much bigger incipient inflation problem on our hands than the subject article suggests. Would appreciate comments on this aspect of a serious problem.

I am quite certain that Ellen is talking about ALL money. She is not differentiating between money kept as coins, cash, or bank account entries. Nor is she differentiating between bank account entries maintained on paper or in computer systems. She is interpolating based upon the M1 money supply - which includes all US Dollars in cash or coins, along with everything in demand accounts, such as checking and savings accounts. She also mentioned the M2 and M3 money supply values. I don't know much about those, but they include the preceeding M1 (or M2) money supply, along with additional places that money may be stored.

So Ellen's concern, is that the total amount of US Dollars in existence has drastically declined.