Money---Supply, Velocity, and Loss of

Money---Supply, Velocity, and Loss of We all know that the money supply has been increasing, and many have been surprised at the decline in prices that has accompanied the recent "growth" of the money supply. We all know that inflation is a monetary phenomenon, Right? Yes that is right, but lets take a closer look at what is happening with the money supply and the velocity of money. If inflation is a monetary phenomenon and money supply is increasing, why aren't we already seeing inflation? During the time that the money supply has been growing the velocity of money has been declining---at an alarming rate. Why has the velocity declined. Read the rest at www.stockshotz.blogspot.com

Hasn't this already been posted here? U.F.O.

Hasn't this already been posted here?

U.F.O.

There was an article posted here written by Dr. Hussman some weeks back on this subject.

Also, the government can print all the money they want, but the question is HOW IS IT BEING
DISTRIBUTED! Are they dropping it from the Empire State Building? From a helicopter? (some people
actually believe this since Benny has a reputation). Did any one here get a check in mail? NO!!

The way I understand it, the gov't is LOANING this money out to financials/banks/GM/Chrysler etc.
These folks are not out there shopping in the malls or grocery stores. They are in the business of
loaning the money out down the chain to those who want to borrow it. So, unless consumers or
businesses can borrow that money and spend it, there is no push towards inflation. The banks have
stopped loaning money out like drunken sailors and consumers have tightened up. IOW the velocity
of money has slowed down. That is main reason why inflation is benign. Another reason is there is
excess manufacturing capacity world wide. If goods and services exceed money supply, inflation
remains low.

Bailouts have not been popular with the general public. If the outfits who received bailout loans fail
to pay them back (which I expect) bailouts will come to an end before the next election.

No, insideskinny posted the same article here earlier in the day. insideskinny is apparently the FF persona of www.stockshotz.blogspot.com, as every one of his/her posts here has just been to provide us with a teaser and link to the current day's blog at stockshotz. U.F.O.