Pitchfork Economics with Nick Hanauer Back to Basics Series: The Velocity of Money (with Ann Pettifor)
Aug 5, 2025
Ann Pettifor, a British political economist known for predicting the 2008 financial crisis, joins the discussion to unravel why money isn't moving as it once did. She reveals that the velocity of money has declined significantly, with wealth concentrated at the top stifling economic growth. Pettifor advocates for taxing the rich as a means to redistribute wealth, stimulate demand, and empower local economies. She emphasizes that understanding monetary policy can transform financial outcomes, especially for women, and challenges listeners to rethink conventional economic practices.
AI Snips
Chapters
Books
Transcript
Episode notes
Velocity of Money Has Plummeted
- The velocity of money has fallen from spending a dollar 17 times a year to about 4 times today.
- Excess money is hoarded by the wealthy rather than circulated, reducing economic activity.
Money Creation and Confidence
- Money originates as credit when individuals apply for loans, not just from central banks.
- Confidence drives borrowing; low confidence contracts money supply and economic activity.
Low Velocity Reflects Economic Fear
- Despite increased money supply from liquidity injections, velocity is low due to subdued economic activity.
- Low interest rates and negative yields reflect fear and lack of confidence in investment.
