Faisal KhanAnswered Jan 8, 2012Money supply is very accurately measured by various Money Supply heads (M0, M1, M2, M3, etc.), which also includes the physical money.
You can read about money supply here:
http://en.wikipedia.org/wiki/Mon...
As most of the money is digital in nature, it really doesn't flow anywhere, except most of it is simply accounting adjustments. When you pay, an electronic deduction happens on your account and a credit on someone else's account.
This is how/what most of the monetary networks (including banks) do all day long. Simply put, they are literally shifting balances between accounts, debiting/crediting millions of entries per day.
You can read about money supply here:
http://en.wikipedia.org/wiki/Mon...
As most of the money is digital in nature, it really doesn't flow anywhere, except most of it is simply accounting adjustments. When you pay, an electronic deduction happens on your account and a credit on someone else's account.
This is how/what most of the monetary networks (including banks) do all day long. Simply put, they are literally shifting balances between accounts, debiting/crediting millions of entries per day.