With trillions of (tax-payer funded) monetary stimulus sloshing around the global financial system, traditional economic theory would predict an increased money velocity moving through the real economy. In fact as shown in this updated chart of the US M2 Money Stock, the multiplier effect for the real economy has never been lower. What central bankers are doing today is not economic stimulus. In fact there is evidence that their monetary experiments are actually slowing economy activity: each tranche of QE has caused fleeting bursts of commodity inflation which have caused companies to contain costs by reducing payroll expenses. Central bankers are moving in direct opposition to wage growth today.
