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Broken Pie Chart


Aug 9, 2020

In the recent Covid financial crisis the Federal Reserve “printed” a bunch of money that increased the money supply. This should lead to massive inflation, right? Well, maybe not if we look at the relationship between the velocity of money (how often the same dollar is used) and the inflation rate. See how to figure out the velocity of money. What is the money supply and where to find it?

 

 

What is the Velocity of Money?

What is the money supply?

Difference between MZM, M1, and M2 money supply

Relationship between money velocity and inflation

Comparing increase in money supply now in 2020 to the 2008-09 period

Money supply has increased over 20% since Feb in the US

Money as a medium of exchange

What happens when the velocity of money goes below 1 (like in Q2 2020)?

Japan experience with deflation and low money velocity

Where can you find the money supply, GDP, and money velocity charts?

 

 

Mentioned  in  this  Episode:

 

See the graph money velocity vs. inflation here https://razorwealth.com/money-velocity-relationship-to-inflation/

 

Current Nominal GDP US https://fred.stlouisfed.org/series/GDP

 

Current Velocity of Money Supply MZM https://fred.stlouisfed.org/series/MZMV

 

Current Money Supply MZM in US https://fred.stlouisfed.org/series/MZM

 

 

Free Chapter from my book Broken Pie Chart https://www.book2look.com/book/YcqUhbCrtN

 

Derek Moore’s book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr

 

Contact Derek www.razorwealth.com