All This Quantitative Easing . . . And The Lowest Money Velocity In 50 Years?

One picture speaks 10,000 words . . .

but I'll add a few anyway:

1. The Fed has created $2.2 in new money since the 2008 crisis
2. About half of this money is currently parked in the Federal Reserve by banks and is collecting interest
3. Much of the other half of this money is sitting on banks' books to shore up new reserve requirements.
4. Hence, the remainder of the money outstanding is changing hands more slowly than at any time in the past 50 years, meaning banks are not lending as readily as they have in past good times/bad times. Nor are consumers borrowing and spending as they once did
5. As consumers pay off debt, money is "retired" and goes to money heaven
6. When money is retired and evaporates to money heaven, it cannot be used as a basis for more fractional reserve lending. Hence, new money must be created with the hope banks will finally get up off that money and lend it to people who will start consuming again and increasing the exchange of said money (i.e., a pick up in "velocity" of money exchanges). We are a nation now addicted to consumption to boost GDP. Savers are anti-American.
7. Hence the Fed will continue to create new money to try and get the banks to lend and the consumer to borrow and spend. Bernanke's heir apparent, Janet Yellen of the San Francisco Federal Reserve Bank, is already signalling she will focus on GDP growth as much as lower unemployment. To reignite growth, money must start circulating at a faster velocity.
8. Hence, keep your eyes on this chart for any uptick in the near future
9. Meanwhile, bet on QE to continue well into 2014 as M2 shows no basing as of yet on this chart

Mike Maloney's 90 Minute Speech On Gold, Silver, Fiat Currencies, the Fed, Manias And What To Do Soon

We've all scoffed at the thought of $2,000 gold in the past. (I can remember people on a certain Motley Fool discussion board saying gold would never cross the $1,000 line.) But what do you say to the thought - the possibility - that gold might one day be priced at $20,000 per ounce?

How would it get there from here?



Even if you don't believe in $20,000 an ounce gold, but you feel something "just isn't right in the world economy", you will want to watch this video to learn what is happening to world markets in stocks, bonds, real estate and other cyclical assets

Mike Maloney, founder of Goldsilver.com, and the writer of a definitive book on gold & silver investing, Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future, gives one of the very best 90 minute seminars - with accompanying screen shots of graphs, diagrams and photos which make his concise, brilliant talk come alive.

Not only is Maloney one of the best speakers on gold, silver, money and currency in the world, he also knows the history of gold, silver, manias, stock markets, the Federal Reserve and a dozen more macro-economic topics which he covers very well in only 1 1/2 hours.


And now, grab a cup of tea or java. Find a comfy seat. Sit and watch this video without any interruptions. Just absorb it like a sponge. You might know a lot of what Maloney covers, but its those historical tidbits about past crashes, government debt, government crisis, etc., which will make you admire the man and his thesis all the more.

After viewing this, you will feel like gold will definitely blow past the $2,000 an ounce mark even if $20,000 might be a stretch. But as Mike stresses, silver is an even better buy at this time in history. And he explains why in a way which shows how silver could outsprint gold for future returns.


Once you've seen this video, be sure to share it with your family and friends: