There are more US dollars than ever before, but the rate at which they are moving in the economy has never been so low.
That was according to the Federal Reserve’s own statistics on August 31, which showed that there had been a collapse in the speed of the M2 money supply despite record money printing.
The rise of the „cantillonarios
M2 supply exceeded $18 trillion in 2020 thanks to countermeasures against the coronavirus, while the rate fell below 1,125 for the first time since at least the 1940s.
Bitcoin price targets USD 288,000 as speed of US money collapses in Q2
This year marks a clear contrast with historical data, with sudden volatility in both metrics disturbingly clear to see.
As reported by Cointelegraph, the historical low suggests that there is a large amount of liquidity, but it barely touches the economy.
One reason for this is that the extra cash remains on the Fed’s balance sheet after its operations, meaning that those closest to the source of the money are the ones who see almost all of its impact.
For RT presenter Max Keiser, this process, known as the Cantillon effect, is turning these beneficiaries into a new sector of the elite: the „cantillonarios.
„This is the only graphic that gives you the best picture of what’s going on. It explains everything,“ he tweeted along with the data from the Fed.
„Billions are being printed, but not circulated. The $ is being addressed by those closest to the printer.
Bitcoin delivery data shows an investment mentality
The printing of money has been under scrutiny in recent weeks, as in addition to the collapse of speed, the dollar is spinning at multi-year lows against major currencies.
Plan B: Bitcoin is on its way to USD 288,000 while the Stock-to-Flow model is running ‚like clockwork
In Europe, meanwhile, there is a return to negative inflation despite the European Central Bank’s own money printing program, which one commentator said definitely did not have the desired effect.
Bitcoin (BTC), as a hard-capitalization currency with a variable and predictable supply, has only benefited from increased central bank debt.
Data from the CryptoQuant chain monitoring resource underscores the strength of Bitcoin’s supply speed: fewer and fewer currencies are circulating as investors choose to save, not spend.
Kraken executive: 5 reasons why Bitcoin is ‚at the start of a bull run
Bitcoin money supply velocity vs. price chart
Last month, Kraken executive Dan Held included the supply readings as a sure sign that Bitcoin was in the middle of a new price race. Inflation and global debt are also on the list.