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What happened to the red line? The blue line?


The red line is total government expenditures as a % of GDP (which excludes accurals for unfunded liabilities). The blue line is velocity of M2 which Jim Paulsen, who is very good, advises is "the rate at which the money supply is converted into nominal GDP". Think of it as the turnover of the money supply, that is, like inventory turnover. Faster means a lot of activity & demand for product, in this case money. Slower means you're not selling what you have on the shelf.

Do we see a pattern?




Reader Comments (1)

July 10, 2013 | Unregistered Commenterhb

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