Legend Art Cashin Warns This May Shock Investors Across The Globe And Create Panic

Friday, April 8, 2016
By Paul Martin

April 08, 2016

Legend Art Cashin warns this may shock investors and create panic.

Eric King: “Art, you put out a note yesterday stating that we needed to take a look at the velocity of money. What is that looking like at this point? Any changes?

Art Cashin: “Yes, M2 has moved up. But perversely and in a countervailing sense, the Bank of St. Louis released the monetary base. The monetary base is what the Fed can do directly. If you can grow the monetary base, then ordinarily it would indicate that you can get monetary velocity and some inflation.

So let’s separate the two. The reason that I wrote about the velocity of money is that (up to now) it has been completely absent for the last 7 years. Now, the fact that the money supply has begun to grow is important because it could be a hint that money is picking up some velocity. That, in a traditional sense, is one of the things that can lead to inflation.

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