The Transactional Velocity Effect Of Speculation And Financialism

Summary

• Financial engineering and speculative transactions have increased exponentially in frequency and dollar volume since the 2008 crisis. (And with regard to housing speculation since 1970).
• Specifically, non GDP - PCE transactions involved in financial engineering and speculation. i.e. stock market, house flipping, debt issuance, rehypothecation, derivatives and central bank quantitative easing.
• What is the nature of the debt incurred in these transactions? How is the demand for money, credit creation and the velocity of the monetary base Vt influenced?

The Nattering One muses... We have Nattered before "there is something in this more than natural". In today's offering submitted for your approval, we endeavor to focus on the influence of financial engineering transactions which have increased exponentially in frequency and dollar volume since the 2008 crisis. (And with regard to housing speculation since 1970).

Specifically, non GDP - PCE transactions involved in financial engineering and speculation. i.e. stock market, house flipping, debt issuance, rehypothecation, derivatives and central bank quantitative easing. For most business and individuals these flows are captured in the banking deposit system, as bank depository required reserves capture consumption or final output transactions (GDP and PCE).

This missive was published as an exclusive to Seeking Alpha.  To access the ENTIRE text for FREE on Seeking Alpha, please click here.  The Nattering One does not receive remuneration if you register, only satisfaction.
There is no cost involved and it has been our experience that if you exert control (by unchecking a box of two) over your communications settings in your Seeking Alpha profile, your email inbox will not be polluted with one bit of Spam (not even the cured pork shoulder variety. Tasty even.)

As we are now a "contributor" at Seeking Alpha, our published articles, instablog and comments can be found here.  Please continue to follow The Nattering Naybob here and at Seeking Alpha. We thank you for your support.