The argument that central banks have been supplying banks with created money, but that money has only been used in the financial sector is not accurate, I believe. The analysis ignores the private sector money creation, which involves private loans made between private parties with no government interaction. Such private sector growth goes unmeasured. I contend the tens or hundreds of trillions of dollars created by the private sector per year enters the "real" economy and has velocity. Your model does not allow you to measure such unimaginable (to you) activity. What's good for the goose, is good for the gander. Central banks should create money for a median world basic income. Unlimited mutual swap lines eliminates exchange rate risk; the ECB currently gets access to unlimited US Dollars whenever it wants. Thus central banks can coordinate currency supplies to keep purchasing power stable, worldwide. I drew some balance sheets to try to explain my point in another way: Attempt to model, using balance sheets, private sector money velocity. > Private Banks assets | liabilities ----------------------------------------------------------- $630 trillion derivatives | Interest payments Loans | Short-term loans Reserves | Net Worth Insurance | | > Private money dealers assets | liabilities ------------------------------------------- Short-term loans | Insurance Interest payments | Short-term loans | > Private Cash Hoards assets | liabilities --------------------------------------------------- Short-term loans | Money-market accounts Insurance | Interest payments | The money-market accounts get interest, created by private sector balance sheet expansions. The created money is spent on real goods. > Adelson assets | liabilities ----------------------------------------------------------------------- $Billions Money-market deposits | Gambling supply ---------- | ---------- Corrupt public officials | Money Baseball team | | The "Money" liability on the last line is created entirely by the private sector, and has velocity. The Quantity Theory of Money does not measure that velocity.