Dave Wrixon

Scary Drop in Velocity of Money: Is Deflation Knocking?

So why is none of this showing up in Government GDP estimates?


On Sep 03 10:58 AM conceptwizard wrote:

> The economy is experiencing system-wide deleveraging and deflation
> is now visible in every sector of the economy. Exports are down YOY,
> so is trucking. Railroad freight is off 18 per cent year-over-year.
> Department stores, building materials, restaurants, furniture sales,
> appliances, travel, retail, outdoor equipment, tech; down, down,
> down, down, down and down. You name it; it's down. Consumer credit
> is plummeting and personal savings are up. Industrial production
> is down, PPI down. Capacity utilization has slipped to 68.5 per cent.(another
> record) There's so much slack in the system, inflation could be low
> for years. Commercial real estate--a $3.5 trillion industry--is plunging
> faster than residential housing. Corporate bond defaults are at record
> highs, Treasury yields are flat, and the dollar index is teetering
> at the brink. It's a wasteland.

Scary Drop in Velocity of Money: Is Deflation Knocking?

When he is talking about the adequacy of GDP as a measure of economic activity being too narrow, I think he specifically means in relation to measuring inflation and the velocity of money, which may be valid. As measure of economic health and the ability of the Federal Government to pay its debts rather than being too narrow it is clearly far too broad.


On Sep 03 09:19 AM londres wrote:

> hang on, are you saying ...
>
> "Certain economic activities are missing here including the Federal
> Reserve’s creation of money."
>
> ... printing money is an economic activity?

The Fed's Bubble Trouble

You mentioned the Fed. Then you threw in some comments about Madoff.

Sorry, I am getting confused. Just which Ponzi scheme are we talking about here?