1 vote

The velocity of money is increasing, if this continues...

here comes inflation. When the economic numbers are bad the dollar rises which means the Dollars aren't moving the money is staying in the banks and if it isn't moving there is no effect on inflation and the Oil prices drop, Gold drops, but when the numbers are good the dollars are moving and the Dollar goes down and Oil rises and Gold rises. It's a paradox, a catch 22, a damn if you do damn if you don't.

That's my story and I'm sticking to it.

PS

They don't care about unemployment to them it is a lagging indicator, alls well!

Signed
Amateur Economist

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Velocity Schmelocity

The concept of money velocity as an inflation multiplier never made any sense to me. Prince inflation tends to depend on the supply of money. But why should how often people spend it matter?

Quick! Call me an Austrian!

Edit: Look. Here's one now.

Google to the rescue again.

Edit 2: While I was googling, gold quietly hit another all-time high.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

oil

Oil is very dependent on other influences besides the dollar though.

Speculators, hurricanes, wars, and shifts in aggregate demand (recessions etc.)

I think it lines up with the dollar in the long run, but in the short term, it shoots all over wildly.

I believe we

will have inflation..but not now! Right now we are deflating...the higher prices from inflating the currency will come...but not until the correction is complete. It will take a while and will be a slow death because they keep pumping more funny money into the system.

First by deflation then by inflation...

exactly...

dont know why this simple fact is denied so vehemently....

http://www.321gold.com/ed...

http://www.321gold.com/editorials/saville/saville110309.html

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

from your OWN link!!!!

"The reason that bank reserves aren't added to the money supply is that they do not constitute money available to be spent within the economy; rather, they constitute money that could be loaned into the economy or used to support additional bank lending in the future."

they pump money in---- it gets hoarded--- no velocity....

meanwhile-- there are more defaults-- more foreclosures-- more bankruptcys--- more job losses...

read it again...... you

read it again...... you missed the point....

meanwhile-- there are more defaults-- more foreclosures-- more bankruptcys--- more job losses...

government debt increases.. to service the debt the government prints more money to pay its obligations.. there by destroying the currency..
IT DOES NOT HAVE TO BE LOANED... DID ZIMBABWE CAUSE HYPERINFLATION BY LOANING OUT MONEY TO THE PEOPLE...

NOOOOOOOOOOOOOOOOOOOOO.........

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

was zimbabwe a world power....

was their currency the reserve currency....

i know what you are talking about---

but this is a political issue more than anything else....

no you are plain wrong....

no you are plain wrong....

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

do you read...

what is written by people who destroy your 'arguments'....

you sound like a parrot----

i am glad i took time to learn about the reality that is going on--- after years of touting the inflation argument--- i am free--

good luck to you and your loved ones---

you certainly seem like you will need it in the coming shit storm that is about to befall on us....

your inflation argument is weak--- it has been shredded by most economists who know what they are talking about on numerous occasions... even the austrian libertarian MISH wonders why people dont realizse we have deflation----

it is not an argument anymore---

lmao.. it is not an argument

lmao.. it is not an argument anymore... GOLD....1088.00 Gold is doing all the arguing we need..

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

The whole thing is based off

The whole thing is based off of a guess as to the actions of the government and central banks. How can you be so sure that these secretive powers wont continue to print massively?

Ventura 2012

do you read what others say

do you read what others say that destroy yours? Yes I have.. I have everything Prechter has written... Prechter is half right and half wrong.

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

let me ask you a question..

let me ask you a question.. what happened to the price of gold when the deflationary depression hit in 1930-40?

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

so also what you are saying

so also what you are saying is Ron Pauls hyperinflationary depression is weak?? thats what you are saying?

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

what ever you say bob

what ever you say bob prechter... deflation?? again I say where??

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

google money supply contraction...

i cant believe that i have to tell you this...

do you know what this financial crisis is all about........

Velocity of money

According to Mises, the whole concept of velocity is hollow:

"In analyzing the equation of exchange one assumes that one of its elements--total supply of money, volume of trade, velocity of circulation--changes, without asking how such changes occur. It is not recognized that changes in these magnitudes do not emerge in the Volkswirtschaft [political economy, or more loosely `economy'] as such, but in the individual actors' conditions, and that it is the interplay of the reactions of these actors that results in alterations of the price structure. The mathematical economists refuse to start from the various individuals' demand for and supply of money. They introduce instead the spurious notion of velocity of circulation fashioned according to the patterns of mechanics." (Human Action, p. 399)

http://mises.org/story/918

"In the capitalist society there is a place and bread for all. Its ability to expand provides sustenance for every worker. Permanent unemployment is not a feature of free capitalism." - Mises - www.mises.org

"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com

he is criticizing the

he is criticizing the macro-oversimplification, but not the concept.

Ventura 2012

Between the Keynesian notions

of velocity and their measurement of GDP, gov't is totally covered from its corrupt goals. To assume that selling one banana five times creates the same wealth as selling five bananas one time is absurd, and to assume that gov't spending is an addition to GDP is equally absurd when that spending can only be taken from private consumption and investment, or inflating the money supply. Gov't spending has nothing to do with wealth creation, more to do with wealth redistribution and overhead creation.

I wonder if Mises ever imagine the forces at work today?

Printing money at will, buying our on debt, complete loss of fiscal constraint.

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Thomas Jefferson once said, "The natural progress of things is for liberty to yield and government to gain ground."

Well, I guess he called that one.

gold price may drop in

gold price may drop in nominal terms .. but not in real terms

All paper money eventually returns to its real intrinsic value, zero. - Voltaire