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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.
Click to enlarge.
The line in black shows the historical velocity of money stock going back to 1869. The line in red shows the velocity of the M2 money stock going back to 1959.
Note the downward trend since the late 1990s. What does this mean? The "poning" of hyperinflation theories will continue until morale improves!
Source Data:
St. Louis Fed: Custom Chart
5 comments:
Once you own all the assets there's nothing left to spend on. Wealth concentration is why velocity is plummeting.
Rob Dawg,
I absolutely agree with you!
Put another way, the billionaires of the world don't eat a million times more canned goods than the thousandaires of the world.
Buffy?
Yes Brad?
Do you remember when great grand pa pa acquired the summer house?
The lake house or the beach house?
No, no! The island compound.
Oh silly Brad! That was great gran ma ma. She bought it as a surprise.
Oh, of course. I'm so glad you are my loving sister... and cousin.
Rob Dawg,
LOL!
Speaking of properties, the following quote may sum up this new economy of ours.
The Cabin in the Woods: Memorable Quote
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