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Silver Wheaton Corp. Message Board

  • we_are_borg we_are_borg Oct 3, 2013 12:22 AM Flag

    What Recovery?

    Crichton314's last post re. the loss of purchasing power as measured by how much gold one could purchase with their annual household income over the past 15 years got me thinking.

    Been doing some reading on the topic of money velocity -- the rate at which money moves through the economy. Long-story-short: the velocity of money is a measure of overall economic activity, it's not perfect but still very useful. VoM is the ratio of marginal GDP divided by the M2 money supply figure. Right now it stands at its lowest in history -- even lower than the Great Depression years! The math is simple: GDP has stagnated to a puny 2% while M2 just keeps going up. Many consider VoM as a good proxy for wealth-generation and economic prosperity.

    The Fed is deliberately killing the U.S. economy to keep inflation at bay. The VoM decline started gradually during the latter part of Clinton's second term then accelerated during the 2002-2003 recession, after which we saw a nice rebound until the crash of '08. '09 saw another rebound followed by an even-bigger slide starting in 2010 -- it has been dropping ever since.

    Go over to the St. Louis Fed site (stlouisfed dot org) & look at all the depressing charts concerning money supply & VoM.

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    • Forgot to mention: federal government spending accounts for close to 40% of the GDP! Absolutely astounding, that's nearly as high as was back during WWII.

      Interesting article in yesterday's Christian Science Monitor:, just Google "US Government Spending As Percent Of GDP" Quote: "For reference, economists in a recent survey predict that GDP will grow at a 2.6 percent rate in the fourth quarter. If the shutdown goes on for a full month, the Merrill Lynch economists see a harsher toll, crimping that growth rate by 2 full percentage points."

      I think we're now living through the second Great Depression and just don't realize it. Me thinks the PM's are about to explode to the upside along with oil. The rest of the world is going to make us pay for our recklessness.

      • 1 Reply to we_are_borg
      • We are Hugh.

        Geordi does not wish to be assimilated.

        Nor do most sane and responsible US citizens. Even most insane and irresponsible IF they were to understand....

        Remember Hugh became teachable and even heroic (episode 'I, Borg') once he was separated and treated kindly by Geordi.

        I was once among the foolish and propagandized. It was not the FACTS that changed my mind, since I had been brainwashed not to consider any non-radical leftist source as a source of did not listen to 'logic' that would have changed my mind...since those offering the facts and reasoning were 'reactionaries' or even racists...or in some way 'dangerous'...

        so I closed my mind in order not to be evil like those 'others.'

        The FACT that it was the non-leftists who had been the KINDEST among all those I had met...

        began to take its toll on my mind...

        along with the increasing failure of the god-like-Carter for whom I needed to vote in order to 'care' about 'the children' and 'the world.'

        'Kindness' led me to consider buying a book that my lefty friends/peers/family...might have considered anathema...

        It was written by a non-globalist, non-agitator...

        I, Borg....

        do not want to return...

24.33-0.08(-0.33%)Oct 21 4:02 PMEDT