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The underlying idea here is that the velocity of money has dropped significantly; each dollar is changing hands less often than usual, so you need more money in
by secabeen 6y ago
The underlying idea here is that the velocity of money has dropped significantly; each dollar is changing hands less often than usual, so you need more money in the system to facilitate the same amount of commerce.
- xur17 6y agoWhat happens when the velocity of money picks back up?
- Bombthecat 6y agoIt depends where. If the money flows from one stock to another :no inflation. If it trickles down (very unlikely) we get inflation.
- tylerhou 6y agoThe Fed sells the assets it bought back to the banks it bought them from.
- dannyw 6y agoBut very slowly, very carefully, and perhaps never at all. See: Taper tantrum.