There are currently some issues with currency flows and as the flow of money is sped up electronically there are fewer people writing checks, instead we are all using plastic credit cards or ATM cards, which is good for retailers and it speeds up the flow of money. This would be simulated as more money in the flow, yet the money in flow at all times is the same and maybe even less as we see it as it has flowed off shore to other countries and unfortunately also effecting their markets and causing serious inflation. Almost the peak before the fall, thinking of course of China. But on a micro-level we see here in the states writing less checks which speeds up the flow of money but also means less will be employed in check clearing houses where several thousand people work in every major US City. Fewer people writing checks? Yes, so they need less in check processing right? http://www.bizjournals.com/sanantonio/stories/2004/05/17/daily19.html?f=et77 Any policy in the US dealing with the economy must take into consideration the artificial increased supply of money caused by simplistic plastic-electronic flows as they are one and the same in the eyes of the user of any currency. It feels the same and needs to be understood and calculated in with the process of judging the expansion or inflation of an economy. What things did you purchase today? Did you use actual cash for everything or did you use your ATM card? See what I mean? Think about it and report back to us your purchase percentages, Paper or Plastic? |
