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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: mishedlo who wrote (97033)4/25/2009 6:33:38 PM
From: ajtj99  Read Replies (1) of 116555
 
Mish, scary stuff in this Mauldin piece. There's a chart in there that shows the velocity of money. Look at it. There's a H&S top on it that projects to about 1.3 or 1.4, depending on how you measure it.

Those are levels last reached during the Great Depression and almost half of the 1997 peak of 2.27. The current velocity is about 1.85 and the mean since 1900 is 1.678.

If the H&S top becomes a complex one, which I suspect it will, the drop to 1.30 or 1.40 may not occur until about 30-years from now. However, it seems reasonable to expect velocity to drop to 1.678 just to revert to the mean, which would negate any increase in the money supply under 10%.

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