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Strategies & Market Trends : The coming US dollar crisis
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To: Tommaso who wrote (43399)11/24/2011 9:52:47 PM
From: Real Man  Read Replies (1) of 71463
 
"Calculated as the ratio of quarterly nominal
GDP (http://research.stlouisfed.org/fred2/series/GDP)
to the quarterly average of M2 money stock
(http://research.stlouisfed.org/fred2/series/M2SL).
Velocity is a ratio of nominal GDP to a measure of
the money supply. It can be thought of as the rate
of turnover in the money supply--that is, the
number of times one dollar is used to purchase final
goods and services included in GDP."

The mathematical meaning of this velocity chart
is that the GDP is not growing much while M2 is.
Yes, typically very high inflation rate requires much higher
velocity of money, perhaps, about 6-10 on that chart
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