Wednesday, September 28, 2011

Velocity of circulation of money.






I took the first chart above and superimposed the figures given by Mariner Eccles (p.710) for the velocity of circulation in the 1920s/30s. Hat tip to Zerohedge for the first chart.

This is all very unscientific. I’ve no idea whether the figures given by Eccles for the 1920s are comparable to the figures given in the Reuters chart. But the RELATIVE changes in velocity around the time of the 1929 crash seem to be more violent than in the recent credit crunch . . . so far. Perhaps there is a treat in store for us: perhaps we’ll go right off the bottom of the chart in a year or two. Sweet dreams.


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