Successful investors react to the invisible hand without emotion and bias. Investment disciplined couple with understanding prevents false assumptions about what's driving a trend. Traders following a false assumption often get smashed when the trend changes, but the assumption(s) do not. Objective challenges to consensus beliefs or opinion often reduces the odds of falling prey to false assumptions.
Those that sense deflation remains a problem have support of the velocity of money (VM). VM measures the rate at which money is exchanged in an economy. We measure the velocity of money as a ratio of gross domestic product (GDP) to M2 money supply. The more people lose confidence with their currency (confidence break in government), the higher the velocity of money goes.
Trouble is, the VM keeps falling. It's lower than the levels observed at the height of the Great Depression.
Careful assuming it will warn us when deflation gives way to inflation. It will, but assuming the time series will be published gives the government too much credit. The real warning comes when the time series is discontinued.
Velocity of Money
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