Where are all the $$$'s going?

[helmsdale]

US M1 increases in 2020 are NUTS!


Velocity is near all time lows however!

[farmaholic]

.............?

[farmaholic]

Or............

[helmsdale]

Seems they can print all the money they want, but they cant make people spend it. And if they're printing it, but it's not being spent, who is parking it, and what are they parking it in?

Equities? Other assets?

Does cash being used to purchase hard assets though deplete M1 and convert it to more illiquid forms? Someone wiser than I care to explain?

[farmaholic]

I have no idea.

Even money parked in a bank is leveraged out, at what ratio? Or doesn't that count?

Every transaction has two sides. So money parked in land or real estate is paid to the seller......where does the seller put it.....in a bank to be leveraged out to borrowers? Purchase other houses?

Stock purchases are bought from stock sellers...where do the sellers put it?

The money raised from Initial and secondary stock offerings can be used to start up or expand businesses....capital spent by business to do business. ....excess revenue paid as dividends....hopefully.

Savers in low risk "cash" or bond(?) investments have been sacrificed to benefit borrowers.

Or isn't any of those "retail" enough? Is the velocity of money only a measure of retail activity?

So it's a slow turn? Or not turning much?

Or is

[farmaholic]

Here's another thought.

How can we have a 1990 money supply supporting a 2020 economy?

So maybe "some" money printing is required.

Someone alot smarter with a degree in economics can explain it all, instead of me with a Master's Degree from the School of Hard Knocks continues to display my ignorance.

[farming101]

Same in the UK... https://www.nytimes.com/2020/12/04/world/europe/bank-england-missing-cash.html https://www.nytimes.com/2020/12/04/world/europe/bank-england-missing-cash.html

Stock piling and crime seem to be the two popular theories. M1 includes demand deposits. My guess is a lot of it is sitting in bank accounts. A significant amount of the money sent out by governments to people likely got converted to cashable deposits

[burnt]

Seems they can print all the money they want, but they cant make people spend it. And if they're printing it, but it's not being spent, who is parking it, and what are they parking it in?

Equities? Other assets?

Does cash being used to purchase hard assets though deplete M1 and convert it to more illiquid forms? Someone wiser than I care to explain?

Can't help you but I did read that our Finance Minister Chrystia Freeland - who is wiser than everyone else in the country because her ways are above our comprehension and past finding out - our Chrystia is inventing ways to "unlock" that money that is sitting in private hands.

No need for concern here...

[Hamloc]

Seems they can print all the money they want, but they cant make people spend it. And if they're printing it, but it's not being spent, who is parking it, and what are they parking it in?

Equities? Other assets?

Does cash being used to purchase hard assets though deplete M1 and convert it to more illiquid forms? Someone wiser than I care to explain?

Let’s be realistic there are just less places to spend money right now. I only go to town when absolutely necessary. Less miles on the vehicle. I have only eaten in a sit down restaurant twice that I can think of in the last six months. Having said that a buddy of mine who does concrete work had a very busy summer. Certainly money being spent on home renovations but much less on everything else.

[Misterjade9]

A National Post article from earlier this week stated, and I will paraphrase, that after the initial round of CERB payments were delivered, there was 10% more disposable income in Canada. This was because the government spent $56B on CERB, when $23B was all that would have been required to cover loss of job income from the shutdown.

Also from earlier this week, Sask. snowmobile dealerships report that sales have been 30% higher, price of lumber has skyrocketed because of more people doing reno's. This summer rec dealers were sold out of campers and ATV's of all sizes, not as many new vehicles sitting on lots. Record setting house sales.

I would say that is where a lot of the money has gone in the last 8 months.

[Guest]

yep , probably never occurred to any of those Cerb recipients to put a wee bit away ?
tis the liberal way

[GDR]

yep , probably never occurred to any of those Cerb recipients to put a wee bit away ?
tis the liberal way

Yes and the other day I was listening to a financial guy on the radio reminding people that they should be prepared for 20% of cerb to be sent back as taxes. Then he says he expects that the government is likely to offer an exemption for cerb payments as taxable if you cant pay it. Boy would that be unfair.

[helmsdale]

Let’s be realistic there are just less places to spend money right now. I only go to town when absolutely necessary. Less miles on the vehicle. I have only eaten in a sit down restaurant twice that I can think of in the last six months. Having said that a buddy of mine who does concrete work had a very busy summer. Certainly money being spent on home renovations but much less on everything else.

Fair enough, I'm much the same, but this trend has been accelerating since roughly 2008... it's not just a 2020/covid slowdown thing.

[SASKFARMER]

I don't know if I trust his small business loan. 60000 now and you don't have to pay 20000 back. Follow the money he's up to something. Slippery ****er is always slippery.

[wmoebis]

yep , probably never occurred to any of those Cerb recipients to put a wee bit away ?
tis the liberal way

Don't think it is just Liberals come to Alberta and listen to the crying about having to pay tax and how evil Trudeau is. Not many Liberals out here unless they have all changed lately.