by Charles Hugh Smith
Of Two Minds
People sense the ‘recovery” is bogus, and their rational response is to save more money rather than squander it.
Sometimes one chart captures the fundamental reality of the economy: for example, this chart of money velocity and the civilian-population ratio. (thank you, Joseph Y. for posting it on my Facebook feed.)
[…] When the blue line is up, more of the population has a job. (the blue line is the Employment-Population ratio.)
The red line is money velocity, the rate at which money changes hands. (Money buried in the coffee can in the back yard has a money velocity of zero.)