From Mark McHugh:
"Velocity of money is the frequency with which a unit of money is spent on new goods and services. It is a far better indicator of economic activity than GDP, consumer prices, the stock market, or sales of men’s underwear (which Greenspan was fond of ogling). In a healthy economy, the same dollar is collected as payment and subsequently spent many times over. In a depression, the velocity of money goes catatonic. Velocity of money is calculated by simply dividing GDP by a given money supply. This VoM chart using monetary base should end any discussion of what 'this' is and whether or not anybody should be using the word 'recovery' with a straight face:
"In just four short years, our 'enlightened' policy-makers have slowed money velocity to depths never seen in the Great Depression...The path we’re on ends with mountains of corpses when the great experiment fails."
And what experiment is that? According to Jim Grant, we have met the lab rats, and They 'R Us:
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