Wednesday, October 10, 2012

Grinding to a Halt

Velocity of Money

The velocity of money (also called velocity of circulation and, much earlier, currency) is the average frequency with which a unit of money is spent on new goods and services produced domestically in a specific period of time. Velocity has to do with the amount of economic activity associated with a given money supply.

Click to enlarge.

A billionaire walks into a grocery store to buy a single can of soup.

There's a joke here. I'm sure of it. Sigh.

Source Data:
St. Louis Fed: Custom Chart


Troy said...

This is a table from UCSC's wealth concentration paper, which has been updated with 2010 numbers.

Top 1% owns 1/3 the stocks, 2/3 the bonds, 3/5 the business equity, 1/3 real estate -- working out to 1/2 the nation's assets.

Bottom 90% own 1/5 the stocks, 1/16 the bonds, 1/12 the business equity, 1/5 the real estate -- 1/8 of the wealth of the nation.

And on top of that we're running a $600B/yr trade deficit!

5-10% of each paycheck vanishing overseas.

Stagflationary Mark said...


I think your statistics clearly show why Fast Money and Mad Money dwell on the stock market and not the bond market.

Stagflationary Mark said...


The debt row from the wealth concentration table should be required reading by anyone with a conscience. Sigh.