Thread: Money Velocity at New Low - Worrisome?

Well let me see...
There is a recovery in corporate profits without dispute. Sitting on record cash hoards.
employment/unemployment, so-so.

Of course, Many people in the bottom half are still deleveraging/paying down debt, and as seen in Many strings here, the top 10%/1%/1/10th% are getting 90% of the recovery wealth.

So of course 'velocity' suffers when the top few percent are just piling the money into already fat bank accounts and don't spend it as they already buy what the need easily. While the bottom half have no more money.

Sorry Oldreliable67, you have but confirmed a Fact that's probably not to your liking.

Originally Posted by Hare

Anyone think the stimulus had any positive effect on this particular statistic? After all, it's purpose was to incentivize consumer activity, although at the same time more and more people were at the same time moving away from investments and towards a savings mentality, so the two forces most likely cancelled each other out almost entirely.

Thats very well possible, and since most of the stimulous money ran out a while back the lack of stimulous may explain lower velocity of money. But that does seem to run counter to the economic expansion we appear to be going into now.

common sense would have told us that velocity should have bottomed out the month before the recovery begain (like 2 years ago). So maybe velocity just bottomed out and the real recovery is just beginning to start.