Economies that exhibit
a higher velocity of money relative to others tend to be further along in the business cycle; thus, should have a higher rate of inflation, all things being constant.
Not exact matches
A
higher velocity means the same quantity
of money is being used for a greater number
of transactions.
But may I point out the fact that outside
of VW's extremely controlled test track that it won't allow anyone else to use (CvK has offered large sums
of money to VW in order to prove his Koenigsegg's to have a
higher maximum
velocity than any
of the VeryGoneWrong's) nary a Veyron private or corporate has even come close to the top speeds claimed by VW - Audi - Bugatti anywhere else on planet earth
These
high cash value life insurance policies are an asset and can be used as tools for acquiring even more assets, through strategic private banking, where you focus on the
velocity of money.
Think
of a classic discount retailer, which doesn't make much
money per unit sold (low margins) but enjoys great inventory
velocity (
high turnover).
Don't miss the fact that in the above examples, your
money is working hard and has never stopped moving, i.e. the
velocity of money... this is the essence
of the conduit whole life insurance strategy because your cash value policy has served as a natural channel through which your
money moves continually, growing perpetually to fund both your safe bucket and
higher risk opportunities.
These
high cash value life insurance policies are an asset and can be used as tools for acquiring even more assets, through strategic private banking, where you focus on the
velocity of money.
Due to the time value
of money,
high velocity money (either cash flow or equity) will boost IRR since the values will be discounted less.
The way to achieve the
highest possible return from your investment capital without adding reckless levels
of risk is to increase the
velocity of money by re-employing positive cashflow to earn at its maximum potential.
Therefore if the
velocity of money increases, and we see price inflation, the fed might not be able to raise interest rates
high enough to combat the inflation.