Theymos is giving certain amount of smerits to merit sources every month. Merit sources can send some of the smerits to quality posts.

I don't know how much total smerit is being auto-generated for merit sources, but if you combine all the smerit together, both the merit source and the ones the members earn, and half of it is brought in as sendable, I think it should be more than enough to serve the community. 
 
Even if the admin decides to increase the number for the source on a daily basis, it's left to the source to either distribute it or not; if it's being stored in one place, then the purpose for it won't be served.
 
Giving merit out to someone is just a choice and not a compulsory action, but still, I don't see the point in holding back merit in any way. If you see posts that deserve merit, you don't need to be a source before you can merit them. 

After looking at the stats created by DdmrDdmr, there's a decline on the last month, previously it's stays around 5K-ish. There were few merit sources inactives, passed away, or any other personal reasons that could be the reason why the merit is declining, but I believe the forum didn't lack of sMerit.

It's because there are not many posts deserved to be merited because most of the posts I read on the last month always discuss about DCA and price predictions that has been discussed multiple times. Although there's an another reason that some users tend to give merit on their gangs, locals, friends etc.



https://public.tableau.com/app/profile/ddmrddmr/viz/BitcointalkMeritDashboard/GlobalSummary

People join the forum and there are other members leave the forum. I can't say the In is bigger than Out or oppositely.

Merit is dropped to merit sources every month and the forum does not lack of merit for distribution. What needs is quality of post and quality posts will get merit, non quality posts will not get merit.

If a poster makes many non quality posts and don't get any merit, it does not mean the forum does not have enough merit for distribution.
https://bitcointalk.org/index.php?action=merit;stats=sources

And roughtly the same amount as sent by Merit sources can "trickle down" to other users to send.

In the past 8 weeks, 43568 sMerit was sent:

That translates to about 23600 sMerit per month. I don't know how many of those came from Merit sources, but it's far from the maximum.

Of course, there's also this:
Either way, Merit isn't scarce. Good posts are. Prove me wrong!

I agree with this. You don't get to know if the merit distribution is easily flowing if you are not a quality poster because you can make a hundred posts and not get merited up to twenty and you'd think there are no merits in circulation. Although if it's from the angle of giving newbies merit, it would seem as if Theymos is looking for an incentive to keep them here. Just like a user said, there are those who register and still leave, some for failing the rules, others for reasons best known to them.
 If a newbie is being registered, that's not a criteria to disburse merits, its not like some giveaway thread or airdrop stuff.

In order to not being abuse there's a limitations of sMerit counts received by the merit source here in our community and they will circulate that by giving for those quality post and thread anywhere as long as they understand . Yes you are right that mate every day there are many accounts got registered but not all of those are purely newbies some of them are have enough knowledge about cryptocurrency and Bitcoins and start sharing their knowledge. So the merit source will review his/her account and once founded that users are knowledge by creating a quality thread then some users give their sMerits for that account.

Source merits and MS's are adjusted by Theymos when he thinks there is a need for it, but other than that, non-MS's have to earn their own Smerits through their posts and give it to posts they think are of good quality. The admin is not going to make provisions of "Smerits" for new users who are joining the forum, Bitcointalk is a forum for Bitcoin discussion and other whatnots, thus newbies should start off without worrying about merits and when they eventually start making quality posts, they are going to earn merits from MS's and other users.

We can't Know if something of this already existsed or not since someone like me and you aren't a merit source, but I've seen occasions whereby some merits sources apply for increase in their merit bank allocation for each month to increase and I think Theymos granted some, this also calls for more attention needed to be given to all already existing merit source applications, since the forum is increasing yearly in numbers and the merit sources are not as much as they were before or year back, so I will go for the two, increasing the merit monthly allocation for those that needed such and reviewing merit source applications.

I don't think if there is some quota of merits that the admin has set to release in the market (forum), but I do know that the way of releasing new merits in the forum is via merit sources and local merit sources. They are given some specific amount of merits by the admin to be shared among other members of the forum. And you can check those merits on merits sources ID if searched on BPIP because it will show only the merits that they have earned not the ones that they have got from the admin.

Well, I think there is no quota because many members apply for merit sources, and the admin selects very few, so keeping this factor in mind, I can say even if the admin has set some quota at the start of the year, he/she won't be able to follow that quota because many people apply for merit source and local merit sources, so the quota can exceed the need. If you are struggling with getting merits, then I suggest you to share valuable posts, besides that, earning merits is not a hard task (Look who is saying it, who doesn't earn merits that much now hehe).