[Chad C. Mulligan]

Hogwash. An increase in the velocity of money is a consequence of inflation. It cannot be a cause.

[socialism_stinX]

I didn’t say increasing velocity of money is a cause of inflation. I said that back in the 70s, increasing velocity of money was a sign that monetary policy wasn’t too loose and interest rates weren’t too low back then.

[Not_Who_U_Think]

“An increase in the velocity of money is a consequence of inflation. It cannot be a cause.”

I agree. In the 70’s there was a bias towards ‘ buy it today before it goes up tomorrow’ that kept prices going up. Until the 1979 recession when high gas prices and high interest rates ate up disposable income.