M3 is the real deal. M2 does not include T_Bills of 100k or more, any time depostit like a 3 month cd, repos, and euro deposits etc. This is the only measure that showed if the FED were printing money. Whey they stopped publishing it in March the growth rate was 8.7%. The “M3” component will be about 3.8 trillion by the end of 06 = growing to 4.04 in 07. This is a lot of money.
It is in this component of money supply that the trade deficit is managed. Here is where the FED buying govt securities would show up – printing money.
You would think the world would be up in arms about the US just printing money to pay debt, but the europeans are also cheating. They are growing their “money supply” at almost 9%.