[Flick Lives]

The money multiplier is only .75. That means all of the bogus stuff that's being printed has no long term effect on the economy.

My understanding of some of this stuff is shaky at best, but would a multiplier under 1 mean the the multiplier effect is actually working backwards? $1 in yields .75 cents out? If so, were in a negative feedback loop. That can't be good.

[grania]

I think you're correct. A money multiplier of 3 would mean that every $10 that I spend in the local economy, as it creates more income and spending, generates $30 in the economy.

I would think a money multiplier of less than 1 means that money is sucked of by govs and other entities that don't spend it and some of it doesn't even become part of the economy.