🚨Canada’s Velocity Breaks Below 1.0: The Arithmetic of What Comes Next
🤔A Deep Dive into the Data, the Historical Parallels, and the Scenarios Through 2040
The Data
Let me start with the raw numbers, because the story they tell is unambiguous.
Canada M2 Velocity: 1971-2024
Velocity is calculated simply: Nominal GDP ÷ M2 Money Supply.
The decline from the peak (3.21) to the current (0.98) represents a 69% decline over 43 years.
Decline Rates by Era:
Period Annual Decline Rate: What Was Happening
1981-1992 -3.5%/year Post-Bank Act adjustment
1992-2008 -2.0%/year Reserve elimination, securitization boom
2008-2020 -2.8%/year QE era, ZIRP
2020-2024 -3.3%/year Post-COVID acceleration
The acceleration in the most recent period is significant. We’re not seeing stabilization — we’re seeing the decline steepen.
For paid subscribers, I want to take you deeper into the velocity analysis than I can in public posts. What follows is the complete picture — the data, the framework, the projections, and what I believe it means for the years ahead.
This is the analysis I wish someone had provided before I purchased Toronto real estate in 1989.
