Global recession - where did all the money go?
The Guardian is running an excellent story to explain the Global Financial Crisis. In a nutshell:
(Amount of Money) *(Velocity of transfer) = (Price of goods)* (Economic Output).
The velocity of transfer is slowing down much faster than the amount of money can be increased. While $1.9 trillion stimulus looks big compared to the $3.9 trillion cash in circulation, it is merely a drop in the ocean of the 290 trillion "great asset bubble" (the whole global GDP was $55 trillion only). Go read the full article.
(Amount of Money) *(Velocity of transfer) = (Price of goods)* (Economic Output).
The velocity of transfer is slowing down much faster than the amount of money can be increased. While $1.9 trillion stimulus looks big compared to the $3.9 trillion cash in circulation, it is merely a drop in the ocean of the 290 trillion "great asset bubble" (the whole global GDP was $55 trillion only). Go read the full article.
Posted by Stephan H Wissel on 02 February 2009 | Comments (1) | categories: After hours
