Dec 222014
 

All the economists are blathering on about how something is broken in the fractional reserve system, something that they need to fix. The issue is the same as it has been for the past 30 years. The government is grabbing far too much power for itself and is screwing things up. Always remember, the government has NEVER ever made anything better. Never.

money 1A disturbing trend in the economy is the money velocity, which is how quickly the money in the system is moving through purchases, lending, payments, all the things that we use money for. Take all of it together and you get how fast the stuff is moving, or the M2 or the money velocity. It doesn’t matter that it’s electronic or physical – all if it moves from one person to another. Too fast and you have inflation. Too slow and you have a recession.

There are a couple of reasons why the money velocity is so low. First, the money velocity is so low is that people don’t have any extra money. We buy food, gasoline and pay bills and that’s pretty much it. Fewer vacations, less road trips, less going out to dinner. Mostly people stay home and plop their fat asses in front of the idiot box. The Fed is complaining that money isn’t being lent, nobody is making long term purchases. That’s because of the administration destroying what was left of the so called middle class for their super cool wealth redistribution program, or making the rich richer and giving money to the unproductive. And money spent on Yachts and drugs isn’t going to increase the velocity of money.

The money velocity or the movement of the money in the system is at it’s lowest  since the 1950s.

When economic activity is high and at risk of going too fast, like in the 1990s, the money velocity is high, which means we’re buying a lot of stuff. The opposite is now happening. This is a rather graphic image of what an economic malaise looks like.

 

The velocity of money. Click for larger image.

The velocity of money. Click for larger image.

The second reason why the velocity is slow is pretty simple. Fewer people have jobs, the majority of jobs are now part time and the inflation rate is pretty high – saying it isn’t just because the Fed only measures it using prices that don’t change doesn’t mean the inflation isn’t wallowing it’s way through people’s budgets.

The cost of the forced health care system is now eating up a large portion of the money coming into households. People are still losing their homes, are having to cut back. The cost of the average monthly bills continues to go up, things like appliances are costing more and more.

I’ve written about it before until my fingertips were raw (I’m a very fast typist). I’m the type of person who remembers how much something cost in the past – it’s how I budget our food purchasesfederalreserve. As recently as 2011, I was able to purchase 2 weeks worth of food for less than $75.00. That exact same food now costs over $100.00. Wages haven’t followed suit, thus the household money supply or it’s buying power has shrunk.

Once you’ve purchased your needed items, paid the bills and look at the amount of the household budget left over, it keeps getting smaller and smaller. I would bet that the money velocity in your own household is moving pretty slowly as well.

Look at the prices of your foods. Look at the prices of just about everything. Milk that was $2.00 a gallon is now $2.89. Cheese that was $2.25 is now $2.50. Same with meats like Chicken and Beef. Don’t even think about Fish these days. A package of 3 T-shirts is almost double of two years ago.

To learn more, follow this awesome Khan Academy video.

Making peace

A Christian Science perspective: What we learn from domestic peace.

Hezbollah leader’s senior bodyguard was Mossad agent

The man who directed the personal security detail of the secretary-general of Lebanese militant group Hezbollah was an agent of Israeli intelligence, according to multiple sources in Lebanon. The agent, who was arrested earlier this year by Hezbollah’s counter-intelligence force, and is now undergoing trial, was able to penetrate the highest levels of the Shiite militant group, and leaked sensitive information to Israel for several years prior to his capture.

Hezbollah leader’s senior bodyguard was Mossad agent

The man who directed the personal security detail of the secretary-general of Lebanese militant group Hezbollah was an agent of Israeli intelligence, according to multiple sources in Lebanon. The agent, who was arrested earlier this year by Hezbollah’s counter-intelligence force, and is now undergoing trial, was able to penetrate the highest levels of the Shiite militant group, and leaked sensitive information to Israel for several years prior to his capture.

Leaked CIA docs teach operatives how to infiltrate EU

Wikileaks has released two classified documents instructing CIA operatives how best to circumvent global security systems in international airports, including those of the EU, while on undercover missions. The first of the documents, dated September 2011, advises undercover operatives how to act during a secondary airport screening. Secondary screenings pose a risk to an agent’s cover by focusing “significant scrutiny” on an operative via thorough searches and detailed questioning.

Leaked CIA docs teach operatives how to infiltrate EU

Wikileaks has released two classified documents instructing CIA operatives how best to circumvent global security systems in international airports, including those of the EU, while on undercover missions. The first of the documents, dated September 2011, advises undercover operatives how to act during a secondary airport screening. Secondary screenings pose a risk to an agent’s cover by focusing “significant scrutiny” on an operative via thorough searches and detailed questioning.

Federal Reserve Gives Yet another Gift to Big Banks

If there are 12 days of Christmas, America’s big banks are on Day 3 because they’ve already gotten two big presents this year. The first came earlier this month when Congress repealed the “swaps push-out” rule, a restriction on trading derivatives not backed by the Federal Deposit Insurance Corp. (FDIC).

Federal Reserve Gives Yet another Gift to Big Banks

If there are 12 days of Christmas, America’s big banks are on Day 3 because they’ve already gotten two big presents this year. The first came earlier this month when Congress repealed the “swaps push-out” rule, a restriction on trading derivatives not backed by the Federal Deposit Insurance Corp. (FDIC).

Debt Collectors Hound Millions of Retired Americans

I may be hard to imagine Grandma unable to pay her bills or Grandpa being hounded by debt collectors. But for millions of Americans, this is the harsh reality of retirement. Faced with a fixed income and constantly rising cost of living, many seniors ...

Private Floating Arsenals Roam Earth’s Waterways Covertly

Floating armouries – ships packed to the gunnels with machine-guns, ammunition and other military equipment – are operating in international waters with a "worrying lack" of regulation. A new report has warned that the vessels could pose a threat to "regional peace and stability".

Could a tsunami disaster happen again?

A comprehensive warning system has been set up to alert coastal countries in the Indian Ocean when earthquakes are judged likely to trigger tsunamis. However, when a real-life test came in 2012, many residents of Banda Aceh in Indonesia didn't go to th...

Marco….Polo and the Chinese Navy

There is a good possibility that Marco Polo sailed with the Chinese navy in the 1400s when they landed on the west coast of America years before Columbus started his voyage.

$10 billion UN-linked climate change fund wants immunity from prosecution

The Green Climate Fund, (GCF) a United Nations-affiliated piggy-bank intended to finance climate change projects around the world, is determined to win sweeping U.N.-style immunities from prosecutions for its global operations--even though the U.S., its biggest contributor, opposes the idea, and the U.N. itself says its own diplomatic immunities can’t cover the outfit.

OPEC Blames Speculators, Non-OPEC Countries, US Frackers for Oil Price Crash

Gulf oil officials on Sunday defended OPEC’s decision last month to keep its production ceiling intact, blaming producers outside of the group for the glut of oil on the market that has depressed prices. Speaking at an energy conference in Abu Dhabi, Saudi Oil Minister Ali al-Naimi blamed a lack of coordination from producers outside the Organization of the Petroleum Exporting Countries—along with speculators and misleading information—for the slump. OPEC officials have singled out American shale producers as a particular problem. U.S. oil production has soared as a result of the shale boom, reducing OPEC exports to the U.S.
Skysa App Bar