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Velocity of M2 Money Stock

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M2 Velocity GDP to Money Supply (M2) has seen a sharp and persistent decline in turnover. The number of times one dollar is used to purchase final goods and services which are included in GDP. GDP in Real Terms is deeply Negative, this is what the chart above indicates. This simply confirms the Reverse Repurchase Facilities behaviors, injections of liquidity which accumulated on Banks' balance sheets had minimal effect on the real economy. It has served to create a Risk On environment for Equities which is now struggling as we see a clear break in trend for RRF's. These are glacial actions that eventually give way as large masses break off and begin a journey adrift. It is the Global Economy that provides the currents and cross-currents.
FRED:M2V
by HK_L61
6
M2 VelocityM2 consists of small-denomination time deposits >$100K - less IRA and Keogh balances at Institutions. Balances in retail MMFs - less IRA and Keogh balances at MMFs. M2: Savings Deposits, Small-Denomination Time Deposits, Retail Money Market Funds, + M1. ____________________________________ In Sum, Consumer Economic activity and Balances. ____________________________________ The Velocity of money is calculated as the ratio of nominal gross domestic product (GDP) to the money supply (V=PQ/M), which is used to measure Economic strength and/or Consumers' willingness and/or ABILITY to spend money or Consume. ____________________________________ The Federal Reserve is well behind the Inflation Curve. Initially, 2024 was the year for Fed Funds rate increases. It has since moved from 2024 to 2023 and now there is a 73% Probability of the Federal Reserve increasing Fed Funds twice in 2022. 8 Months of tapering at the indicated removal of $15Billion is not going to occur. The Federal Reserve will not be able to delay, they will increase the reduction to Bond/MBS Purchases in order to begin a Rate Cycle sooner than Equity Complex Participants have assumed. Thye have not recognized the underlying ISSUES, should Money Velocity begin to increase... they will be forced to reduce QE faster and further than the majority are anticipating. 4 Fed Members prefer to conclude the Taper at the end of March 2022. ____________________________________ Peak Earnings are now behind us, Q2 2021 was the Zenith of this Credit Cycle.
FRED:M2V
by HK_L61
M2 VelocityThe squeeze is on, as M@V declines, there will be a Point of Recognition when the average consumer sees Food Prices as a RISK. At that time in the not too distant future, they will begin to spend and hoard forward. We are approaching the point at which on a percentage basis - this has occurred Historically speaking. The panic Point throughout History has been 35% per annum. We are getting close as most food princes have risen in excess of 22% in 2021. A great many items, significantly more. Commodity Prices for basic materials as well, see Cotton. Scarcity eventually gives way to Panic.
FRED:M2V
by HK_L61
M2 - Velocity and Explanation of DIVERGENT TRENDS Explained V.1The explanation will be broken into several parts below: You see what I see. M1/M2 Velocity collapsing while Fiscal Policies become far more extreme in nature. Profile and Structure are comprised of a great many observable metrics. Volumes are wafer thin. Gamma squeezes are, on balance, failing. Calls are what has driven volume, Stops at levels are being used as well. The same Large Caps drive Price from a narrow and concentrated group of 7-9 equities. AAPL is an excellent example - the Cult of iMob is not driving price with outright purchase, but Calls. We see this weekly, APPL's range is 141 to 150. It is approaching the Resistance @ 150. Concentration Metrics show clear RISKs to any type of event - Profiles are out of balance. QQQ's continue to hold 363, for now. Support and Resistance have morphed into a weakening structure within the overall Market Profile. ____________________________________________________________________________________ ATHs are meaningless to a functional trader. Structure and Profile has far more to it than Higher Highs. The Divergences have never, in the history of the Equities Markets, been this extreme. Never. We can see Longer term indicators beyond the DOW Transports which clearly align within the numerous indicators demonstrating the widest negative divergences ever. These have been Divergence warnings during 2007, 2011, 2015, 2020 and now - 2021. The Magnitude of each has been interesting: The Scope and Scale of each Daily Divergence is highly correlated to the percentage retracement with only 1 exception. 2007 - 56% decline - Scope / 86 weeks of DIV - Scale 2011 - 16% decline - Scope / 16 weeks of DIV - Scale 2015 - 12% decline - Scope / 60 weeks of DIV - Scale 2020 - 32% decline - Scope / 47 weeks of DIV - Scale 2021/2022 - TBD and yet it has exceeded the 90 year cycle Highs In March of 2022 we will have completed the 90 year Cycle. Will it be the onset of a wider and more pronounced and obvious Global Economic Contraction? Or is it front run? I believe it will be front run in dramatic and very violent fashion. It will depend on Confidence, which is waning dramatically, we are seeing this in M1 - a dramatic decline in Consumer purchases. Factories around the Globe are being shuttered. It follows the pattern Samsung exhibited in 2019... almost perfectly. Review the 2019 10Ks and 10Qs.
FRED:M2VShort
by HK_L61
3
Bitcoin vs Money, Hyperinflation Hier zie je de DXY , de Velocity vs de Money Supply tegen de Bitcoin koers in een chart. Hyperinflatie indicator? Wanneer de omloop snelheid weer toeneemt? De blauwe lijn is de Velocity of Money de omloop, M2Ve. De rode lijn is de Money Stock Total Money Supply for United States. Goud gele chart. Bitcoin paarse chart. DXY bovenin. De Velocity daalt - omloop snelheid daalt maar het totaal aan geld neemt toe, Printer says Brrrr. Blauw tegen de rode lijn. De stimulus wordt niet gebruikt, onzekere tijden geld komt niet in omloop, Velocity drops. Zodra dit weer in omloop komt of er komt bijvoorbeeld nog meer helicopter geld - kan dit ineens enorm toenemen met Hyperinflatie tot gevolg. Mike Maloney:https://youtu.be/P4_1pwsm5LY?t=662 Alles in price in new price scale.
FRED:M2V
by TraderJet
1
M2 Supply * M2 Velocity = GDP, Right?Hey y'all, Somebody care to explain the anomaly of 2020 here? This has never happened in the 40 years of data here, maybe it happened sometime before. What has the FED f up now? And what does it mean? As I see it either the dollar gives up and goes full kenukistan, or GDP Goes down again. They can also try to print this s away, however it seems that by printing they will further decrease velocity, as it doesn't really translate to inflation, except in the stock market. Which everyone ofcourse knows what a joke it is. I just hope one day some of us may have the balls, and the wisdom to short the thing at the right time. Anyhow, really interested if anyone out there has a say on this matter?
FRED:M2V
by MedianLineAnalysis
2
Analysis of Inflation/deflation and covid-situationInflation: Persistent growth of the price level of a basket of selected goods. Deflation: Fall in overall prices in an economy. Increase in purchasing power of the currency. From deflation to hyperinflation, the historical route: 1. Central authority inflates paper assets, i.e. bonds, stocks and derivatives. Effect is capital inflow from real economy into paper assets. This leads to a deflation in real assets. This deflation is a result of a fall in demand in the real economy (money rather being displaced to paper assets). 2. Commodity prices lower than production costs. An effect of less money being spent in real economy. Commodity prices fall to attract/please customers demand-level. Counteracted with more monetary easing. _Security purchasing_. 3. Commodity producers either go out of business or cut production. 4. Point three leads to commodity shortages (creating excess demand), which in turn leads to spike in price. 5. This leads to a commodity-led inflation of prices. Capital flow from paper assets to real assets. Capital which has been bound up in the stock market will now flow into real assets. Exacerbating inflation in congruence with the degree of monetary easing done during deflationary period. 6. Loss of confidence in currency. This leads to a flux to hard assets!!! 7. Hyperinflation ensues. Theoretical basis for inflation/deflation (quantitative monetary theory): -The quantity theory of money states MV = PY (money times velocity = price times output). -This is the theoretical basis of the proportional increase/decrease in monetary stock/velocity. If perfectly inverse proportional, price times output stays constant. By this identity (formula) we can of course also see how inflation happens: If money increases while velocity and output stays constant, price will increase (inflation). Where are we at? -Degree of deflation can be represented by velocity of money. This metric has been falling sharply recently, and has been falling since -08 atleast. Central authority counterbalances this with inflationary measures like monetary easing. We can see by M2 Money stock and M2 Money velocity that both of these charts has gone full vertical just recently (january -19). -We would expect commodity prices to fall as well as security prices to raise. A study by Peter Oppenheimer (october -19), chief equity strategist at Goldman Sachs, shows that commodity are prices down 50 % since -08. While asset prices are up 300 % during the same period. Covid-19 lockdowns will effectively arrest the situation and temporarily kick the can down the road. How? -Less people frequent stores and places of physical trade: This leads to lower velocity of money. -By creating a supply shock/shutting down the economy: A supply shock happens when there is a lower output (Y decreases/GDP decreases). This leads to higher prices (see equation above). --> Effectively M (UP) x V (DOWN) = P (UP) x Y (DOWN). --> Lifting shutdowns will have an adverse effect on the deflation/inflation problem. _Dynamic inflation goal_… need I say the rest.
FRED:M2V
by wgpeders
1
Can't feel inflation yetCan't feel the affects of inflation yet because the money that has been added to the financial system has not started to move yet. If we look at the comparison M2 money has increased by over 100% since 2008 yet the flow or velocity of money is down 30%. Keeping in mind that since the start of 2020 there has been an increase of M2 money around 16%. While many assets crashed against the dollar showing signs of deflation even though on paper money supply should be causing inflation. That is caused by money not moving and as a result there can be a steep devaluing of the currency once people start to spend again. "What is M2? M2 is a calculation of the money supply that includes all elements of M1 as well as "near money." M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, mutual funds, and other time deposits. These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits." www.investopedia.com "What is Velocity of Money? The velocity of money is a measurement of the rate at which money is exchanged in an economy. It is the number of times that money moves from one entity to another. It also refers to how much a unit of currency is used in a given period of time. Simply put, it's the rate at which consumers and businesses in an economy collectively spend money. The velocity of money is usually measured as a ratio of gross domestic product (GDP) to a country's M1 or M2 money supply." www.investopedia.com
FRED:M2V
by JamesRennie
2
Velocity of money signaling economic depressionM2 money velocity is considered the pulse of an economy. This metric refers to the number of times a unit of currency changes hands between people and businesses. As you can see, the velocity of money has been nosediving for decades. This is the story of the real economy, not the financially engineered stock market. Notice that as interest rates began to normalize, the velocity of money saw some relief in its drastic fall. There's no doubt it will continue falling as interest rates move lower once again.
FRED:M2V
by Brian_Nibley