In our society at large, how fast the money moves is an indicator of the health of our economy. Faster velocity implies more people spending more money per month.
More spending is not necessarily a good thing, if we all already have what we need. But when there are unmet needs, increased economic activity can be a sign of things getting better. In the Common Good system, economic activity means people are finding the Common Good system useful, which is always a good thing.
Notice that the faster money circulates, the less money we need, to buy the same stuff. Velocity is a money-stretcher! For example, suppose there are $1 million worth of Common Good credit in circulation. Let's say the velocity is 1 in April (the whole million gets spent) and 2 in May (the whole million gets spent twice). In May we used the same amount of money to buy twice as much.
For comparison, the velocity of M2 money stock in the United States over the past half century has fluctuated between .25 and .45 per month (as you can see on the chart, Common Good credit circulation velocity is quite a bit higher).
The local and inter-community rates are shown separately. When either rate is high, it reflects healthy trade (within the community or between Common Good Communities).
The Dollar exchange velocity is also shown (blue line), to reflect opportunities for import-replacement — buying things within the Common Good System that currently are being bought elsewhere.
« Back