US Velocity of Money

STATISTICS DO TELL … Per the site Washingtonsblog.com and an article by Mark McHugh at http://acrossthestreetnet.wordpress.com/2012/08/19 “Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or [other ]. In a healthy economy, the same dollar is collected as payment and subsequently spent many times over.
In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what ”this” is and whether or not anybody should be using the word “recovery” with a straight face.” … “In just four short years, our “enlightened” policy-makers have slowed money velocity to depths never seen in the Great Depression.”US Velocity of Money
Another gem from the article: “…total government spending (Federal, State and Local) accounted for over 40% of GDP in 2011.”

Leave a Reply

Your email address will not be published.