Economists love to talk about money, and in particular the money supply. It’s covered in every beginning to advanced macroeconomics course.

Why do economists consider money supply so important? Largely for two reasons. First, money is, in a broad sense, a basic unit of account against which most everything traded is measured. Since economists love to talk about trade, they can’t ignore the effect of money on trade. Second, money affects prices, a main research area in economics. (Most of discussions around money can broadly be placed underneath these two umbrellas.)

Printing money

(Click to enlarge, Interactive Image available here)

Printing Money – money Supply expansion since 2007

The following graphic and table show the expansion in the supply of money by country since 2007. The numbers are in local currency.

(As a technical note, the money supply is represented by M2. M2 comprises currency in circulation and bank vaults, bank reserves, traveler’s checks, demand deposits, checkable deposits, savings deposits, and time deposits. Also, all figures are in local currency.)

Overall, the country with the largest increase in their money supply is Venezeula at 867 percent through May 2014. After Venezeula is Azerbaijan (745 percent), Mongolia (556 percent), Bolivia (455 percent), Iraq (377 percent), Argentina (345 percent), Qatar (331 percent), Zambia (331 percent), and Nigeria (307 percent).

The countries with the smallest increase in the supply of money through May 2014 include Portugal at 2.2 percent, Greece at 3.7 percent, Ireland at 6.0 percent, Luxembourg at 12.7 percent, El Salvador at 17.5 percent, and Netherlands at 18.7 percent.

(One important technical note is on the control of the money supply. Some might ask: How can a country have an increase in the supply of money if they don’t control their monetary policy, such as is the case with EU member states. The answer is that money supply aggregates encompass more than what the ECB can control, with the supply of money including such things as loan growth and other banking measures.)

Overall, the supply of money around the globe has exploded since 2007, the year in which the initial onset of the worldwide financial crisis began. With such an enormous expansion in the money supply, it is truly amazing that “officially measured” inflation has stayed as low as it has. Whether the “officially measured” inflation figures can be kept at levels that don’t eat away at the value of money “too quickly” is, undoubtedly, something central bankers and markets in general would like to know. With this uncertainty know, one thing is known, the supply of money will eventually lead to a higher devaluation of money (i.e. inflation) unless central bankers get serious about addressing their money supply manipulations over the past seven years.