You don't define velocity. As Dr. Philip George posits: ““Changes in velocity have nothing to do with the speed at which money moves from hand to hand but are entirely the result of movements between demand deposits and other kinds of deposits.”
Thus a credit crunch will destroy velocity (where the banks outbid the nonbanks for loan funds).
Whereas the 1966 Interest Rate Adjustment Act created a .50% interest rate differential in favor of the Savings and Loan Associations (the thrifts, the nonbanks), the Emergency Economic Stabilization Act of 2008 provided a preferential interest rate differential in favor of the commercial banks, which induced nonbank disintermediation (where the size of the nonbanks shrank by $6.2 trillion dollars, while the banks were unaffected, increasing by $3.6 trillion dollars).
Funny, because the banks don't loan out existing deposits, or savings. Savings flowing through the nonbanks never leaves the payment's system.
The nonbanks were rolling over very short-term liabilities to fund longer term real-estate assets, thus their funding was abjectly and instantaneously, thereby removed. A huge monetary policy blunder.
Complete nonsense. Velocity falls when monetary savings aren't activated. The only way to activate monetary savings is for their owners, saver-holders, to spend directly or to invest directly or indirectly outside of the payment's system. The demand for money increases during contractions. Injecting new money is not a complete offset because it reduces R *.
You don't define velocity. As Dr. Philip George posits: ““Changes in velocity have nothing to do with the speed at which money moves from hand to hand but are entirely the result of movements between demand deposits and other kinds of deposits.”
Thus a credit crunch will destroy velocity (where the banks outbid the nonbanks for loan funds).
Whereas the 1966 Interest Rate Adjustment Act created a .50% interest rate differential in favor of the Savings and Loan Associations (the thrifts, the nonbanks), the Emergency Economic Stabilization Act of 2008 provided a preferential interest rate differential in favor of the commercial banks, which induced nonbank disintermediation (where the size of the nonbanks shrank by $6.2 trillion dollars, while the banks were unaffected, increasing by $3.6 trillion dollars).
Funny, because the banks don't loan out existing deposits, or savings. Savings flowing through the nonbanks never leaves the payment's system.
The nonbanks were rolling over very short-term liabilities to fund longer term real-estate assets, thus their funding was abjectly and instantaneously, thereby removed. A huge monetary policy blunder.
Personal property price increases will cause retirees to lose their homes
Complete nonsense. Velocity falls when monetary savings aren't activated. The only way to activate monetary savings is for their owners, saver-holders, to spend directly or to invest directly or indirectly outside of the payment's system. The demand for money increases during contractions. Injecting new money is not a complete offset because it reduces R *.