The Last Boomer

Welcome to Parity

Pitaking is worried about the decreased velocity and thinks it's a sign of deflation but let's not forget that the equation of velocity has not only a numerator (total transactions*price level) but also a denominator (money supply). The velocity could be slowing down either because the numerator is getting smaller (lower prices and fewer transactions) or because the denominator is getting bigger (too much money). My guess is that all components are changing in the direction that slows the velocity: prices are falling, fewer transactions are executed, and the money press is running non stop.