They withdrew deposits from banks, which because of a fractional reserve system caused a drop in the money supply in spite of a rising monetary base.

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However, expansion of the monetary base does not necessarily lead to growth in broad money, which measures the supply of credit to businesses and consumers and which ultimately drives inflation.

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Yet many people treat the monetary base as a measure of the money supply.

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The monetary base and various measures of the money supply followed that pattern--very slow growth for about a year then explosive growth in recent weeks.

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