M2 money stock vs. velocity
Can anyone explain what's going on between these two charts:
M2 Money Supply: https://fred.stlouisfed.org/series/WM2NS
M2 Money Velocity: https://fred.stlouisfed.org/series/M2V
M2 has ballooned significantly, but the velocity of M2 is down by almost 30%. There also seems to be a longer term trend of higher M2 and decreasing velocity.
What's the relationship between these two values, and what's going on in the economy based on these?
Submitted February 28, 2021 at 12:37PM by YourRoaring20s
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