We simply don't have the metrics to show it one way or the other. We have M2V for example in the US, but it isn't broken out by household income percentiles or even quintiles. We could have great velocity from lots of capital movement from equities for example, but very sluggish velocity in retail sectors that serve the low and middle socioeconomic classes.
I think the general weakness in retail (not entirely attributable to e-commerce, as e-tailing is still around 10-15% of overall retail) is likely explainable by low velocity of money in the low to middle classes. The wage stagnation over the past few decades while overall corporate revenue and profits continue to grow certainly suggest some kind of low velocity or siphoning effect. There's a certain survivorship bias in that comparison since corporations that stagnate to much eventually are put out of business, while developed nation citizens can stagnate until they pass away, so it isn't a perfect comparison to hypothesize about. But again, we simply aren't measuring for any of this nuance at this time.
If we did start measuring for it somehow, then someone would have to figure out how to measure the unit of money moving between income bands and from household to/from "big corporations" (say, any of the publicly-traded companies in the CRSP US Total Market Index and privately-held companies with the same amount of revenue as the lowest revenue element in the CRSP). Damned if I know how that would be captured, though.
But that's not how money works. Banks don't loan money they have on deposit. They loan money they create from thin air, and are required to have a certain amount of deposits to potentially cover that if their exchanges with another bank become too imbalanced. That's what's called "leverage."
Then either corporations can hoard all the money, leaving less for the rest of us, or banks can create money from thin air, in which case there's no practical limit and hoarding doesn't matter.
There is only so much the super rich spend, what's left is either sitting somewhere collecting interest or being exchanged between other super rich and never trickles down again as tax or paychecks.
Money is a zero sum game and the super rich are hoarding it, which widens the social gap.
Money is absolutely not a zero sum game. More is created e.g. by loans all the time. Wealthy people provide a lot of stability by either 1) putting money in banks, which provides capital for loans and 2) investing in long-term ventures (which create "jobs").
Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzled by the notion that loans create new money.
Agreed. I guess you can argue that loans put money back into circulation, but the obvious corollary is that rich people hoarding money effectively destroys it.
There is no limit in how many loans a central bank can give to regular banks because the central bank doesn't have to be backed by deposits, gold or any other scarce resource.
