Thursday, November 3, 2016

Bottoming watch for Velocity of Money continues.

I have shown the wave count for M2 velocity of money before but this time I will show it for MZM (Money of Zero Maturity). Essentially, it means, the velocity of cash.  I expect the velocity of cash to begin turning upward within 1 year and perhaps sooner.  It will be accompanied by higher prices and rising interest rates.

I think what will happen is that people will lose confidence in the issuing authority of the fake money no matter whether the privileged adolescent or the career criminal wins the election.  Either of them will inherit 50 years of reckless borrowing in order to buy things we really didn't need.  Not for the poor mind you - the condition of the poor has not gotten better.  The rich have gotten richer and so they must logically have been the beneficiary of the deficient spending even if most people don't understand the mechanics of it.  All you have to do is observe the end result and you will come up with the right answer.

When VOM does turn up, it will likely do so at a much faster rate than before, something similar to the red pointer shown below.  If my model is correct, it will move up quickly enough to scare people.   That will be a very good time to have a nice pile of gold and silver coins in your physical possession.

Don't say you weren't warned.  I have been doing so for years now but always saying that deflation will likely precede the inflation.  But if I look around, gold deflated before it bounced, oil deflated, many things deflated.  I still think that the stock market and real estate bubbles have to pop before the massive inflation begins.  Time will tell but anyone who thinks a soft landing is coming needs to read more history and take a math lesson or two.  We ain't seen bad yet, but its coming.

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