The most inclusive set of instruments used to define the term “money supply.”
As a child, Janet Yellen had three little piggy banks. The first one, made of ceramic, only contained cash until, one day, her pet Pug, Fido, knocked it off the kitchen counter, causing it to break and spill its contents across the floor.
So, Janet picked up all of the cash and added it to her second little piggy bank (made of plastic) which contained CDs (financial, not musical). Unbeknownst to Janet, when gathering the cash, she accidentally picked up some dog biscuit crumbs that were on the floor as well. Smelling this treat, Fido chewed through the second little piggy bank to get at his snack, leaving both the cash and CDs strewn across the floor.
Frustrated, Janet once again gathered her financial assets and added them to her third little piggy bank (made of forged steel), where she also kept her institutional money market funds.
While Janet’s system for organizing her financial instruments was ruined, she felt confident that Fido would not be able to disrupt the broad liquidity that now existed in her final piggy bank.
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Finance: What is a Liquid Market?17 Views
Finance allah shmoop What is liquid market Well it's one
that trades Ah lot High volume Lots of buyers Lots
of sellers Liquid lots of cash sloshing this way In
that way Go this way and that Did you ever
see a liquid market go this way and that That
little song Did you ever see a lassie Never mind
All right Weir Liquid markets Good Well because they implied
there's Lots of cash ready willing and able to be
put to work And that's usually a sign of a
healthy risk seeking active market versus risk averse one which
is you know hiding Ah liquid market means that investors
want to put their cash toe work that they have
actually saved cash along the way and or that they
have relatively easy access to credit And you can think
about it from the perspective of your kindly loving realtor
who wants a world where lots of people are buying
homes But in orderto have that happen you have to
have lots of people who are also selling homes at
the same time Otherwise prices just go higher and higher
with no supply to meet demand And at the end
of the day in real estate and it's in the
stock market while the most important thing yes that the
brokers get pays So that's a liquid market one that
trades a lot like it's Wet trading back and for
sloshing around not ice Where everything's you know all jammed 00:01:22.109 --> [endTime] up No needs heat or an animal or something
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