M2- Zero Hedge

M2 “is there” and now the Fed needs velocity to go with it, says Zero Hedge.  I will go one step further and say that they are not likely to get said velocity until the d Boys have convinced everybody that it isn’t coming.

Even then, it may not come domestically here in the good ole’ US of A or more accurately its (monetary) velocity will lead right out of the country, into global resource and economic investments not anchored below the surface by a sublime and unpayable debt burden.

But money supply is there and it is being ramped exponentially and systematically through various methods by very smart theoretical and mad scientists; paper alchemists.  You cannot create limitless amounts of something, unbacked by productivity of any kind, and expect that its value in relation to real things and real productive centers will not erode exponentially over time.

So M2 is there.  The herd will ignore this just as it did in 2008 and the transitional asset of monetary value will benefit first, its miners will gain the famed leverage that gold bugs have lost hope on, followed by resources (commodities) that the productive world needs to function.  Finally, those productive economies that are aligned with the inflationary future will catch the bid as a new global system gets sorted out.

This will probably be a grind – over years – which is why those with short attention spans, a lack of stamina and/or no plan or road map are going to get blown up.  But yeh, M2 “is there” and velocity will probably be more tricky.

Source: http://biiwii.blogspot.com/