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**Nfvzjvcl** · 10-28-2009, 01:26 AM

Right on the money, no pun intended. You can increase money supply all you want but if it isn't going anywhere, so what?

Actually, changes in monetary velocity (defined for money supply M2, as it usually is) are much less important than is the ratio M2/M0 (leverage of banks)

The former changes appreciably during dislocations, but not as dramatically as leverage.

10-28-2009, 01:26 AM	#5
Nfvzjvcl Join Date Oct 2005 Posts 470 Senior Member	Right on the money, no pun intended. You can increase money supply all you want but if it isn't going anywhere, so what? Actually, changes in monetary velocity (defined for money supply M2, as it usually is) are much less important than is the ratio M2/M0 (leverage of banks) The former changes appreciably during dislocations, but not as dramatically as leverage.
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