Friday, March 5, 2021

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


5 comments:

Who Struck John said...

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

Stagflationary Mark said...

There’s no place like home appreciation.

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

Anonymous said...

Yellen doesn't see a problem.

GO BIG!

Mr Slippery said...

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

Stagflationary Mark said...

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. :)