Friday, December 20, 2013

Velocity of Money 1900 - 2011

Money velocity is falling, a temporary dip or a "Deja vu" of the period 1918 to 1945, that is the question ?

Source: Federal Reserve Board / Hoisington Investment Management / HS. Dent foundation

When money velocity is rising, it usually means the economy is expanding. When money velocity starts to fall as we saw after 1918 it usually means the economy is slowing down or even worse contracting.

Geir Solem

Elliott Wave Technician
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