Stop, Stop, Stop … Printing! Consumer Purchasing Power Down 97% Since Fed Creation (1913) And Down 16% Under Biden (M2 Money Velocity And Debt Velocity STINK!)

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by confoundedinterest17

The Hollies said it best: Stop, stop, stop. FIAT Money Printing that is.

Typically, we look at M2 Money Velocity (GDP/M2) as a measure of how much the economy grows by expanding the money supply.

M2 Money Velocity is currently at 1.344, and still below where we were under Trump prior to Covid. After Powell printing palooza after Covid, M2 Money Velocity collapsed and is slowly rising, but remains low by historic standards.

Perhaps a more interest velocity is DEBT velocity (GDP/DEBT). Under Biden’s Reign of Error, Federal debt has increased by $6,539,359 million while real GDP has increased by only $1,948.731 billion (or roughly $2 trillion in GDP growth after $6.54 trillion in debt). Or a DEBT velocity of 0.3. Yikes! No wonder China is bailing on US debt!

This chart makes debt issuance look better than it really is. Again, the DEBT VELOCITY of 0.3 is terrible meaning that for every $1 of Federal debt, we get 30 cents in Real GDP under Biden. One of my macroeconomics textbooks stated that debt growth is fine as long as real GDP growth rises faster than debt growth. Apparently, Treasury Secretary Janet Yellen didn’t read that textbook! Real GDP has grown by 9.43% under Biden while Federal debt has grown by … gulp .. 24%.

Yes, the US is borrowing like the proverbial drunken sailor while they “invest” in green energy, wars in Ukraine and the Middle East, and massive social welfare programs (like the old breads and circuses from the dying Roman Empire). When watching the media’s obsession with Taylor Swift and Chief’s Tight End Travis Kelce at The Super Bowl, it reminded me of “Breads and Circuses” as our nation is collapsing like a dying star. (That is why I Iike Gold, Silver and Bitcoin!)

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What about The Federal Reserve? It was created in 1913 after signed into existence by President Woodrow Wilson. Since The Fed’s inception, consumer purchasing power has declined by 97%.

And under Biden, inflation has been so bad that consumer purchasing power is down 16%.

In summary, The Federal Reserve has been printing like crazy (I would say Batshit Crazy, but I actually think bats are adorable). And Treasury (under former Fed Chair Janet Yellen) has been borrowing like crazy too. While politicians claim the economy is in great shape, it is really because The Fed is printing wildly, Yellen is borrowing wildly, and much of US GDP is not due to the private sector, but Federal government spending … to the donor class. This is NOT a sustainable and will eventually crash into a ravine.

Here is an excellent interview with Col. Douglas MacGregor who talks about Bitcoin.

 

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