My question is regarding the checks which the US government has sent out during the pandemic. Below is a chart of M2 money supply increase as a result of it:
It is also said that 40% of all the m2 money supply in circulation has been put in "created" during the pandemic.
Usually money that the government creates in form of stimulus such as in 2009 and subsequently has been in form of bank reserves, against which banks loan out to businesses. So funds do not make to people in form of "money in the pocket" so to say. Thus the m2 money supply has more or less been constant. Except now...
My question is who is sending these checks to people? Banks or is it coming directly from FED? Are these checks against bank reserves which were created or was this money "printed" out of thin air?
The reason I ask is, this is not a loan which one has to return with interest, so it would seem that this new M2 money is not against any "bank reserve".