EDITOR NOTE: The following article almost reads like a short mystery, a short mystery about a completely broken US financial system. The clues are complete, clear, and laid out, yet you can’t quite put them all together. Something doesn’t quite add up; the complete picture seems a bit “inverted.” And once you’re able to finally piece it together, you get a terrifying glimpse of what you’re looking for. The final clue in the article you’re about to read is the chart on money velocity. If you know anything about financial history, you’ll notice an eerily similar pattern that resembles Weimar in 1919. Considering our current inflationary environment, what do you think will happen once money velocity reverses its trend, moving sharply upward?
All I can say is “Yikes!!” Something is broken in the US financial system.
As I have discussed before, bank deposits are soaring while loan demand is … not.
The recent banking data shows a slowdown YoY in bank deposits, but also shows negative loan and lease growth at banks.
Residential mortgage growth is negative YoY. At least commercial mortgage lending is still growing, albeit at a lower rate.
Speaking of something being broken …
Powell and Yellen are probably screaming “Give our creation life!!!!!”
Yikes! Something happening.
Originally posted on Confounded Interest