Velocity of money

Money is the modern economy’s mechanism for pricing and facilitating the flow of goods and services. So the health of an economy can be measured by capturing the speed at which the money available in it (the money supply) is being spent.

When consumers are feeling nervous, they will tend to save, or hoard, cash rather than spend it. Equally, if banks are reluctant to lend, less money is available for spending. That slows down its velocity and can point to trouble ahead for businesses and the wider economy.

One way of measuring velocity across an economy is to look at the ratio of a country’s wealth (gross national product) to its total supply of money. The higher this is, the faster money is likely to be circulating.

Jim Mellon: The single best stock to buy to profit from the robot revolution

Jim Mellon explains how Silicon Valley will turn all of our lives upside down, and picks the best company to buy to benefit from this huge wave of disruption.


Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


24 December 1955: Norad begins tracking Santa

On this day in 1955, the North American Aerospace Defense Command began tracking Santa Claus as he sped around the world delivering presents.