The Inescapable Conclusion is that FedRes Policies Have Effectively Crashed the Velocity of Money

• Very interesting explanation on the true reason for the collapse in money velocity. One that has not occurred to me.
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• The Inescapable Conclusion is that FedRes Policies Have Effectively Crashed the Velocity of Money
  by Charles Hugh Smith, http://charleshughsmith.blogspot.com/
  Money Velocity Is Crashing–Here’s Why
  That the velocity of money has been crashing while the money supply has been exploding doesn’t seem to bother the mainstream pundits. There is always a fancy-footwork explanation of why whatever is crashing no longer matters.
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  Take a look at these two charts (top of post) and tell me money velocity doesn’t matter. First, here’s money supply: notice how money supply leaped from 2001 to 2008 as the Federal Reserve pumped liquidity and credit into the economy, and then how it exploded higher as the Fed went all in after the Global Financial Meltdown.
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  Now look at a brief history of the velocity of money. There are various measures of money supply and various interpretations of velocity, but let’s set those quibbles aside and compare money velocity in the “golden era” of the 1950s/1960s and the stagflationary 1970s to the present era from 2008 to 2015–the era of “growth”:
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  read more.

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