Velocity Of Money Sits At Historic Lows….

Posted By on August 6, 2013

What this means is that money is not being circulated through the system, instead it is parked in things that don’t ecourage growth in the economy.  Velocity of Money is now at all time lows.

Here is how to explain it:  The velocity of money (also called velocity of circulation and, much earlier, currency) is the average frequency with which a unit of money is spent on new goods and services produced domestically in a specific period of time. Velocity has to do with the amount of economic activity associated with a given money supply.

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