Sunday, October 16, 2011


Understanding Velocity
velocity of money
Rate at which money circulates, changes hands, or turns over in an economy in a given period. Higher velocity means the same quantity of money is used for a greater number of transactions and is related to the demand for money. It is measured as the ratio of GNP to the given stock of money. Also called velocity of circulation.
Investopedia explains Velocity of MoneyVelocity is important for measuring the rate at which money in circulation is used for purchasing goods and services. This helps investors gauge how robust the economy is. It is usually measured as a ratio of GNP to a country's total supply of money.
SIMPLY :"how quickly money moves around economy the rate at which money circulates in an economy"

Read more:

THE IMPLICATIONS OF WHAT MY CHARTS SHOW   **(below is what the FED has tried to do to stimulate economy and economic growth an historic RAPID rise in the money IN CIRCULATION)

Declining Money Velocity and Its Implications

Our economy has a severe circulatory problem. While the Fed has greatly increased the amount of available money in its efforts to restore economic growth (Figure 1), the rate at which money has been flowing through the economy — the “velocity” of money — has been plummeting (Figure 2).

BUT the policies are NOT working, prices of things have gone higher, wages have not, employment is stagnant, pushes to cut govt spending will make it even worse. In the meatime, these FED policies of near 0 interest rates give savers a 0% retrun on money...and VERY LITTLE else to invest in except? THE RISKY STOCK MARKET!!! YOU GOT IT.....which the avg American has littel invested in (unlike the 1%) and their homes are still declining in value....(where most have or HAD investment)


No comments: