Monetary Policy and Bubbles
Neel Kashkari
616

Thank you for sharing your thoughts publicly, Neel.

What I would like to know though, is why money velocity is continuing to drop like a rock while the Fed and Treasury have monumentally increased money supply since 2008. From what I can tell we have added over 4 Trillion to the money supply yet money velocity has never been this low since we have been measuring it.

How is it that all of this “new money” goes straight out of circulation? With even just a money supply ratio of 1.7 (historically low) we would add 25–30% to our economy without having to increase the money supply to do it. Think of that 25–30% over the course of 3–4 years.

Baiting for an answer ..

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