So last April the Fed changed the rules and eliminated the six-withdrawal limit on savings accounts. It wrote:
The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.
It was an obvious and nearly risk-free way to help people. Just let them have easier access to their savings.
But it changed the relationship between M1 and M2.
An interesting point on M1 and M2 [Measures of money]. With the signing of the 1.9T$ bill today in the US, we’ve essentially created 6T$ over the last 10 months. Just like that… Covid19 has brought unprecedented suffering to many. Deaths, Unemployment, Medical complications, lifestyle changes, Social unrest and several other ramifications which we are…