Read the Beforeitsnews.com story here. Advertise at Before It's News here.

By Broad Oak Blog (Reporter)
Contributor profile | More stories

Story Views
Now:
Last hour:
Last 24 hours:
Total:

US money velocity at historic low

Sunday, October 28, 2012 12:41

% of readers think this story is Fact. Add your two cents.

St Louis Fed figures show that the rate at which money changes hands is at it slowest since records began in 1959. The velocity of M2 is now 1.568, down from the historic high of 2.135 in mid-1997 – a reduction of 25.56%. The first 3 quarters of 2012 are all below the previous nadir in 1964.

Roughly speaking, for every 4 dollars spent at the end of the last Millennium, Americans are now spending 3.

But the money supply has not grown sufficiently to make up the shortfall (online figures only start from early November 1980, but the pattern is clear):

M2, the Fed explains, is a broad measure of money held by households, so in its way it reflects the state of the real or workaday economy.

The latest figure for M2 is $10.2 trillion, up from $4.03 trillion at the end of 1997, a year in which GDP was $8.33 trillion. If money velocity had not changed, current GDP would be not $15.78 trillion as it now is, but $21.8 trillion – 38% higher.

Quantitative Easing (not included in M2) is not to stimulate that kind of growth, but to avert or mitigate disaster. So far, according to the November issue of Forbes magazine, $3.3 trillion has been poured into banks and quite a lot from there into the government, just to keep things going, but Mike Whitney of Global Research reports estimates of $4 – 10 trillion more needed. Even then, the cheap cash may be shoring up stocks and bonds, but is doing little to stimulate demand or support those who try to meet it.

The much-maligned Federal Reserve is buying time, but the question is whether anyone is doing anything useful during the reprieve. Governments of both parties have spent 30 years encouraging banks to funnel money into homes – largely unproductive and illiquid assets – and the drag of debt has finally slowed demand to a halt.

Meantime, productive capacity has been haemorrhaging Eastwards, and the pool of labour skills in the US are in danger of decay. Even if much consumer and real estate debt were forgiven now, it would be a challenge to rebuild and restaff factories; but all that, I think, is what has to happen.

INVESTMENT DISCLOSURE: Mostly in cash (and index-linked National Savings Certificates), but now planning to build up some reserves of physical gold via regular saving.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

2012-10-28 12:25:58

Source: http://broadoakblog.blogspot.com/2012/10/us-money-velocity-at-historic-low.html

Source:

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

LION'S MANE PRODUCT

Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules

Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.

Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.

Comments

Visits:	1,708,481,952
Stories:	8,450,474