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

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To: skinowski who wrote (109179)3/1/2010 2:42:22 PM
From: Hawkmoon  Read Replies (2) of 116555
 
IMO, it's not just physical money supply, but the velocity of financial transactions, that must be incorporated into determining if there is too much, or not enough, liquidity:

seekingalpha.com

John Mauldin also does a good job of explaining the relevance and importance of monetary velocity:

ritholtz.com

Bottom line though.. the Fed can inject tremendous liquidity into the system, but if it doesn't spur velocity of transactions, GDP will decline.

Hawk
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