The Velocity of Money

There is a nice simple explanation of it in Wikipedia. But what are those money supply graphs and what do they mean? The Fed is interested in it because they can punt the can down the road looking for some distant shore to put money on from a very slow boat to that promised Retirement. They want to keep it from causing too much inflation. Now what is going to happen when all the Baby Boomers retire, and there is no more need for their skills in a workplace increasingly dominated by robotics?

Ignore that for a while... It is like a ship in transit. That is what they tell us. We all want that boat to go faster but at what cost? Inflation you answer when in actual terms it is closer to Inflation in a slower, but not Stagnant, economy.

Suze Orman of course tells you to eliminate debt. Live in relative poverty while addressing any and all debts instead of chasing the trappings of games and the latest coolest thing. Use your time and youthful industriousness to an advantage. Get somebody else's used things to eliminate the increasingly rapid depreciation curve, or buy broken things and learn to fix them yourself. I followed that religiously while younger, but what now? The whole game is not only being made harder by trying to split the receding goalposts, but try to make gains where nobody is looking.

The past couple of trading days have really walloped the market down. If you have some cash, it is a spot where you can jump on to try and fight at least some of the inevitable. Last year, that same market really beat inflation. But where to put it? If you do not have a trading account funded and ready, you are out by default, so you are waiting for the next cycle. The Mad Money guy is looking for a newsworthy home run. More realistically, maybe we are looking for more RBI's. Anyways, we both have our list of bargain hunting stocks looking for the same thing because soon, the bases will be loaded for a very short time if the rain doesn't cancel the game with a quick rebound.

I don't know, but some Consumer Staples, Health Care Staples, and something related to an Aging Population seems good for starters. Maybe some consumer staples ETF's and Healthcare Staples ETF's would help. They should provide  a fair hedge against inflation. A wise old accountant told me that Undertaking seemed to be a high growth recession proof industry. Two things are inevitable they used to say; Death and Taxes. But we are in a more complicated state waiting for the former while reducing the latter. That would be the Mysterious appeal of Bonds I thought maybe.

Of all things to get clobbered down, Inverse Volatility ETF's will take the biggest hit. They will also make the biggest rebound. They continue to ratchet up and grow  from reversing the Contango of Carrying Fear Insurance. They can be noticeably cranky though on a monthly basis. At least they have some relation to the oft reported *general* market sentiment according to the perceived expected volatility of the S+P 500 Index. And there is the VVIX Index to guage it. But how close do you guage your entry point to get as close to bottom as possible? What do we know will be coming? Will Monday be Black or White, only to be followed by a Blacker  or Whiter Tuesday before more earnings, and the Fed Decision regarding tapering of bond and MBS (Mortgage Backed Securities) near the Wednesday Close?

Anyways, the current market downturn preceding a big numbers week will present some real opportunity to get ahead a bit. The question is will it last? My answer is that is has to eventually. Warren will be taking advantage of the elevated Fear of the unknown to get greedy.

And Janet Yellen, the incoming Federal Reserve chairperson, will be doing her best to quell the fear of the real bunch of nervous nellies this week.