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Global recession - where did all the money go?


The Guardian is running an excellent story to explain the Global Financial Crisis. In a nutshell:
(Amount of Money) * (Velocity of transfer) = (Price of goods) * (Economic Output).
The velocity of transfer is slowing down much faster than the amount of money can be increased. While $1.9 trillion stimulus looks big compared to the $3.9 trillion cash in circulation, it is merely a drop in the ocean of the 290 trillion "great asset bubble" (the whole global GDP was $55 trillion only). Go read the full article.

Posted by on 02 February 2009 | Comments (1) | categories: After hours

Comments

  1. posted by Jan-Piet Mens on Monday 02 February 2009 AD:
    Kuerzlich gehoehrt -- fand ich koestlich: "Das Geld ist nicht Weg, es hat nur ein Anderer." Emoticon smile.gif