The Sting - Velocity

In The Sting, the 1973 movie starring Paul Newman, the main action hinges around an elaborate Depression era scam using ‘wire fraud.’

A Depression Era Henry Gondorff

Wire fraud is where telecommunications are interfered with so that the resulting output information - or the timing of it - is different or creates a disconnection to the original information input. This is essentially what HFT (high frequency trading) amounts to, for example, because the interposing of a cost line is not relevant to the actual (real) buying and selling of shares or financial positions. HFT is wire fraud. It makes use of the disadvantage that buyers and sellers are at when the buyer input data is deliberately falsified through spurious buy signals.

One of the most significant, and usually forgotten, elements to wire fraud is the deliberate misuse of time, or timing.

If news you get from reporting in a certain location is deliberately delayed, you are at a disadvantage to those who are doing the deliberate delaying.

Creating a false impression in the gap of uncertainty, allows for guilt by impression - and then default action springing from the consequence of the impression having gathered a certain emotional reality through mistaken belief.

When you look at today’s low interest rates and the absurd size of the static Money Supply, it is possible to gain an impression that something new is happening in economics. Commentators and even a large number of economists worldwide are grasping to ‘see’ some trigger for price collapse or other disturbance because of the seeming impossibility of a continuation of sheer magically created ‘money’ by the Fed without some negative consequence, either on the value of the US Dollar or prices and inflation.

People are forgetting about the ‘Time’ component in the Equation of Exchange. The Fed has tried to change the standard capital term of ten years on bonds by creating focus on something they call the long end, by which they attempt to skew people’s perceptions towards a belief that there is actually something called a thirty year bond and even a connection with property mortgages and so-called longer term money.

Under people’s noses however, there is the catastrophe in circulation velocity - or the number of economic transactions in the domestic flow model - in evidence. By preventing people from ‘seeing’ that a major consequence has already taken effect, ordinary people are at an extreme disadvantage. Everyone believes the Dow can never come down, and that QE infinity can persist without negative consequences. The consequences, however, are already here.

Irving Fisher’s Equation of Exchange has not been repealed, or repudiated by any fact.

People such as Christine Lagarde actually have the audacity to point to low or slow growth as a concern that politicians and bankers must address, whereas in fact it is the money velocity that central bankers themselves have caused to collapse through pushing the envelope on total nominal Money Supply.

The ‘trigger’ is - there is no trigger required! Not many people have worked out that ANY velocity increase, whether economy wide or singular, will pull on the other factors in the Equation (of Exchange) directly.

An umbrella in the BRICS rain - or,
'it's raining BRICS.'

The biggest weapon competing countries - China, Russia, India - have, is not a military weapon. It is the ability or capacity to invoke circulation velocity on the American and general ‘Western’ economy. People have talked hyper-deflation but this is no longer possible at this point now that the gross nominal Money Supply has gone to such extreme numbers whilst circulation velocity was terminally low.

And it is possible to affect velocity from outside of the Fed or Washington politics.

As I demonstrate how in follow-up articles, you will be able to massively profit from the dynamics of simple application of the Equation of Exchange.