Cool Checks On Economic Recovery
Inflation can be a dead issue even while the federal government pours money into the economy if the ''velocity of money'' is also dormant. ''Velocity of money'' is how often a dollar is spent over a particular time period.
If the velocity of money is at a standoff there is nothing to inflate. Even if a given stock market vaporizes trillions of dollars as the stock market collapses and misguided government printing money to finance all the politicians ill-conceived paybacks to lobbyist, nothing inflationary will happen until the velocity of money accelerates.
The hare-brained Keynesian theory of economics says that the economy can be ''stimulated'' by deficit spending. However, encouraging a working, affective economy will not be possible if in the red obligations is looming. A country or a household for that matter cannot borrow money to spend its way out of red ink deficit. The situation's risk profile is very similar to a huge Ponzi contrivance gamble with the taxpayer holding an empty bag!
Printing money out of thin air cannot solve the velocity of money problem. When people are not spending money for goods and services, it is because they are a bit shaken. When they are a bit shaken, they become more conservative with their purchases until a confident floor is reached.
The whole system of money changing hands arises out of people preserving their money. In a barter economy, equal units of exchange are essential for a proper yardstick of exchange. So, a standard supply of money was created. If the money supply expanded and the velocity of money was stagnant, inflation would balance it out again.
The federal government created a debt crisis, and consumer confidence will be low until that IOU arrears is paid off. Yet, even in a deflationary situation, the bottom will eventually be reached. The velocity of money will move along in time and the economy will be set to rights again.
At the same time, the government has greatly inflated the amount of money it generates. When the economy eventually takes off and the velocity of money improves, so inflation will also. As consumer confidence grows and all the extra printed money follows after a set number of services and goods, inflation will surge as a consequence.
Nonetheless, here is the question: when will you realize that confidence and money velocity increases are taking place? Read the Wall Street Journal and other newspapers and sources known for their financial sections and check the Consumer Confidence Index's numbers. These numbers are known as ''leading indicators'' and reveal economic trends well before they are observed by hard data.
The other foremost financial guides that show change earlier than the economy changes are: the Producer Price Index (PPI), Employment Indicators, Retail Sales Index, the National Association of Purchasing Management Index (NAPM), Curable Goods Order report, Gross Domestic Product (GDP) reports, Consumer Price Index (CPI) reports, Employment Cost Index (ECI) and the Productivity Report which checked how much output is created by a unit of labor. Provided by Cool Checks - 23212
If the velocity of money is at a standoff there is nothing to inflate. Even if a given stock market vaporizes trillions of dollars as the stock market collapses and misguided government printing money to finance all the politicians ill-conceived paybacks to lobbyist, nothing inflationary will happen until the velocity of money accelerates.
The hare-brained Keynesian theory of economics says that the economy can be ''stimulated'' by deficit spending. However, encouraging a working, affective economy will not be possible if in the red obligations is looming. A country or a household for that matter cannot borrow money to spend its way out of red ink deficit. The situation's risk profile is very similar to a huge Ponzi contrivance gamble with the taxpayer holding an empty bag!
Printing money out of thin air cannot solve the velocity of money problem. When people are not spending money for goods and services, it is because they are a bit shaken. When they are a bit shaken, they become more conservative with their purchases until a confident floor is reached.
The whole system of money changing hands arises out of people preserving their money. In a barter economy, equal units of exchange are essential for a proper yardstick of exchange. So, a standard supply of money was created. If the money supply expanded and the velocity of money was stagnant, inflation would balance it out again.
The federal government created a debt crisis, and consumer confidence will be low until that IOU arrears is paid off. Yet, even in a deflationary situation, the bottom will eventually be reached. The velocity of money will move along in time and the economy will be set to rights again.
At the same time, the government has greatly inflated the amount of money it generates. When the economy eventually takes off and the velocity of money improves, so inflation will also. As consumer confidence grows and all the extra printed money follows after a set number of services and goods, inflation will surge as a consequence.
Nonetheless, here is the question: when will you realize that confidence and money velocity increases are taking place? Read the Wall Street Journal and other newspapers and sources known for their financial sections and check the Consumer Confidence Index's numbers. These numbers are known as ''leading indicators'' and reveal economic trends well before they are observed by hard data.
The other foremost financial guides that show change earlier than the economy changes are: the Producer Price Index (PPI), Employment Indicators, Retail Sales Index, the National Association of Purchasing Management Index (NAPM), Curable Goods Order report, Gross Domestic Product (GDP) reports, Consumer Price Index (CPI) reports, Employment Cost Index (ECI) and the Productivity Report which checked how much output is created by a unit of labor. Provided by Cool Checks - 23212
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posted by X - Men @ 9:03 PM
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