Thoughts From DJ "The RV and the Velocity of Money" 1-10-2022
DJ: DID YOU KNOW?
Most people have little understanding of how currency actually works. In particular U.S. Currency. It becomes a relevant concern for those of us invested in the GCR/RV and a factor one should consider before absorbing the Intel providers’ narratives.
Because, like it or not, if you plan on “Exchanging” your foreign currencies you will be exchanging them into U.S. Currency. Knowing the massive amount of expected exchanges where is the money coming from?
The Fed can’t really “print unlimited money” without consequences. For starters, every time it buys something with “printed money” (usually a treasury security or, lately, a mortgage bond) it has to buy it from a bank. It pays for it by crediting the bank’s account at the Federal Reserve.
Another fun fact is that it is estimated that between one-half to two-thirds of the value of all U.S. currency in circulation is outside the U.S.
There is currently a total of only $1.7 trillion in U.S. physical currency in circulation, and roughly 80% of that value comes from 11.5 billion $100 notes that are in circulation. The keyword is “circulation”.
By the time a bill is retired, it would have facilitated many hundreds of transaction and each transaction is linked to the one before it, and the series of subsequent transactions for each bill creates what is known as “velocity”. (The velocity or money is a measure of the number of times that the average unit of currency is used to purchase goods and services within a given period of time).
It also estimates the movement of money in an economy-in other words, the number of times the average dollar changes hands over a single year. High velocity indicates a strong economic activity, while a low velocity indicates a reluctance to spend money.
So back to the original question, where is the money coming from for a GCR/RV to occur? Point of fact, you don’t need to have the total amount of money available for exchange when you consider circulation and velocity.
Money only has value when it is spent or put into circulation to be spent. Otherwise, it lays in a dormant state until its value is applied to the purchase of goods and services. So when you are paid an enormous amount for these expected exchanges, you may have a large bank account but it only becomes relevant (applied value) when it leaves the account for a purchase of goods or services.
The point of this memo, again, is to put a sense of reality to GCR/RV concept and how the function of a GCR/RV will be implemented into the economy without causing massive chaos.
The indicators we should be watching for is the behavior of the economy and the velocity of its currency. Bottom line, what good does it do to have a boatload of money with nothing to spend it on?
There is enough goods and services transaction available in the global environment to handle the input of these large sums but before that can happen I.T systems had to be developed to track and facilitate the logistics of the transactions.
Thus the implementation and development of Quantum activity.
Have you ever put a puzzle together? It comes with a picture of the completed puzzle. Keep your eyes on the bigger picture not the piece of the puzzle. We are just seeing a few of the pieces puzzle and losing focus on the bigger picture.
DJ