Here are two charts that West Virginia reader Elliot Simon sent yesterday. They are the charts of the M1V and M2V...a ratio of nominal GDP to a measure of the money supply. That is, the number of times one dollar is used to purchase final goods and services included in GDP. M1 is cash...and M2 is cash, plus checkable funds and time deposits such as CDs.
(Click on image to enlarge)
(Click on image to enlarge)
Elliot found "the M2V chart to be the most telling because its the lowest velocity everrecorded. The velocity measure means no one is spending, they're hanging on to their money for dear life. There is almost no lending or borrowing going on, either. In other words, for all intents and purposes, we're in recession and the National Bureau of Economic Research will probably recognize that whenever they get around to it, which is usually 6-12 months after the fact."
Host Chris Waltzek interviews
U.S. Retail Collapse Accelerates
Richard Russell - Get Rid Of Debt & Prepare For Tough Times
“When looking for where the bubbles may be, realize this: in this
current cycle, where central bank balance sheets are at the core,
the bubble is everywhere — in stocks, in bonds, in growth
expectation, in credit spreads, in currencies, in commodity prices,
in most real asset prices — you name it! This is why I think that
this current bubble, if it is allowed to fester and develop into
2013, will have such widespread consequences when it bursts that it
will make 2008 feel, relatively speaking, like a bull market... When
this bubble bursts, I don’t think there is an easy way out. Who will
be the bailout provider?”
current cycle, where central bank balance sheets are at the core,
the bubble is everywhere — in stocks, in bonds, in growth
expectation, in credit spreads, in currencies, in commodity prices,
in most real asset prices — you name it! This is why I think that
this current bubble, if it is allowed to fester and develop into
2013, will have such widespread consequences when it bursts that it
will make 2008 feel, relatively speaking, like a bull market... When
this bubble bursts, I don’t think there is an easy way out. Who will
be the bailout provider?”
No comments:
Post a Comment