I used the U.S PCE YoY as the base, I then overlaid the M1 YoY and Real GDP YoY. I used the beginning of this years as a reference point as that is roughly when the fed began increasing interest rates.
As the price level declines demonstrated by a decline in the money supply and PCE YoY declining
Real GDP YoY is seen increasing
To my understanding this...
Even if the purchasing power is rising, without the increase of velocity of money, there will be no inflation and sustained economic growth.
Circulation/velocity of money measures the interval between money transactions, decline means less transaction is taking place and the interval between money transactions is getting longer.
According to the July 2020 Senior...
Continuing my look at currency value (see ), here's several ways of looking at "How much is that asset worth?"
The green/red price bars are the S&P 500 . The green line is M2 money velocity , one measure of value and dilution of the US dollar. It's basically how many times our GDP could "buy" our money supply . It's interesting to notice how public...
