New Great Depression Coming in 2021 – Jim Rickards

Posted at 8:36 AM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Five time. best-selling financial author James Rickards contends all this money printing to retard the effects of CV19 is not going to produce inflation—just the opposite.  Rickards explains, “Let’s say I go out to dinner and I tip the waitress.  The waitress takes a taxi home, and she tips the taxi driver.  The taxi driver takes the tip money and puts gas in his car.  In that example, my $1 tip had a velocity of three:  the waitress tip, the taxi tip and the gasoline.  So, my $1 produces a velocity of three.  My $1 produces $3 of goods and services.  That’s velocity, but what if I stay home, don’t go out and don’t spend any money?  In that case, my money has a velocity of zero.  $7 trillion times zero is zero.  If you don’t have velocity, you don’t have an economy.  The $7 trillion is the base money supply, and that could be $8 trillion or $9 trillion . . . and that by itself does not produce inflation.  What you need is turnover, and we are not getting that.”

Rickards says, “Initially, the problem right now is deflation and not inflation, but deflation.  There is too much debt.  Growth is too slow, and the psychology is wrong because people are saving and not spending.”

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