Friday, March 5, 2021

GDP to M2 Ratio: We’re Not in Kansas Anymore


5 comments:

  1. It's all fun and games until someone wants to buy something real.

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  2. There’s no place like home appreciation.

    I'll get you health insurance, my pretty, and your little dog pet insurance too!

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  3. Yellen doesn't see a problem.

    GO BIG!

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  4. The M2 velocity of money chart looks very much the same. Down big starting in 2008 and off a cliff in 2020. https://fred.stlouisfed.org/series/M2V

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  5. Mr Slippery,

    Not only does the M2 velocity chart look very much the same, but I think it actually IS the same.

    I never looked too deeply into how they calculated the velocity (or did and don’t remember), but it makes sense that it would be GDP / M2.

    So, I charted GDP/M2 - M2 velocity and it was nothing but a negligible amount of noise hovering around zero.

    Good catch! Very enlightening. :)

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