Although organic growth in the real economy is slack, the Fed has managed to maintain about 10 percent growth rate in M2, and around 8.5 percent in MZM.
As you might expect with money growth this high and real economic activity hovering at recession levels, the velocity of money is at record lows.
This is not yet stagflation, but it is the setup for such a condition to develop. The question is 'how pernicious' will it be.
I suspect that without reform, the extraction process of the financial sector and the perverse global trade regime will continue to dampen real economic activity despite the Fed's money supply expansion.
