05 August 2016

Financial System Awash With Liquidity That Is Not Reaching the People in the Real Economy

"The velocity of money is the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period.

In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy."

St. Louis Fed

"Most of them became wealthy by being well connected and crooked. And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation

"If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."

Simon Johnson, The Quiet Coup

In other words, what we may be seeing here is a declining 'bang for the buck' or 'the law of diminishing returns' for the massive amounts of liquidity which the Fed has been selectively applying to the financial system using quantitative easing.

How can this be happening?

Does adding even more quantitative easing work?  Work for whom?

The 'recoveries' or sparks of real economic activity are growing fainter, and shorter, while the subsequent declines are continuing in length and depth.

One can hardly see the 'jumps' in velocity between the long plunges driven by helicopter drops from the Fed to the one percent, leaving the real economy and the broader public further and further behind.

At what point does the fallacy of endless money printing without consequence begin to 'bite?'

One might fear that the Fed is continuing to add fuel into and around a vehicle that is stuck in a ditch and wrapped around a telephone pole.

And all the elite financiers and their sock puppet politicians can seemingly do is to keep pouring on the gas.

There is a currency war going on.  It's perhaps unintended but very real objective is the subjugation of whole peoples, including the domestic public, to a financial and political elite.
It is the child of unrestrained greed and the concentration of power into fewer hands through through the unscrupulous manipulation of money and credit.

Although it may drape itself and its wars in the flag and pious patriotism, in a very real sense it is nationless and raceless.  

This is an audacious oligarchy that serves only their own greed and self-interest for power and money.