Dr. Lacy Hunt was the first economist to explain why money velocity is important: It measures whether a country is investing its money productively to create continued growth. When it’s above average and growing, that’s a sign of productive investment that pays good returns and creates more such investment. Falling is a sign of increased speculation. Falling and below average means the deleveraging of unproductive and counter-productive stages.

Like my demographic spending tools and urbanization vs. GDP per capita gains, I have now expanded this to all major countries in the world. This adds the acid test of whether investment is productive, and is especially important in emerging countries that are making the biggest investments in new infrastructures to urbanize. It can also help spot where corruption and bureaucracy are a hindrance.

Here’s a quick summary of the best and worst velocity readings in the major regions of the world:

I’ll start here with the western developed countries including Japan. Canada is actually the best at 1.33 with the U.S. second at 1.12 – both in North America, not Europe. The worst is Hong Kong at 0.26 (China on steroids!), with Japan a close second worst at 0.40. China is also very low at 0.50 because of constant overinvestment in infrastructure.

The highest velocity is in the youngest, least urban and fastest growing regions starting with Sub-Saharan Africa. Here, the poorest – the Congo – is highest at 7.99. Sounds great, but a very risky and volatile country at this point for investment. The lowest is the richest and most urban country, South Africa, at 1.37.

Southeast Asia is next and a much more affluent and attractive investment environment. Here, Indonesia is the highest at 2.58, and surprisingly Vietnam – which used to be much higher – is the lowest at 0.63. A sign of corruption seeping in?

My favorite region ahead for demographics and urbanization is South Asia, dominated by India. Velocity is similar in the key countries here, with Pakistan the highest at 1.71 and India actually lowest at 1.36. Still some corruption and bureaucracy there.

The most turbulent, but likely less so in the coming boom, according to my Geopolitical Cycle – the Middle East/North Africa – has Turkey as the strongest (1.85), although its political shift is more than worrisome. The weakest is U.A.E. at 1.16 due to constant overbuilding in real estate, like Hong Kong and China.

And finally, closer to home is Latin America from Mexico and the Caribbean to Chile. Here, surprisingly with its near-term debt, currency, and default problems, Argentina is the highest at a whopping 3.51. The largest country, Brazil, is the worst at 1.04. Argentina also has the latest peak in its Spending Wave in 2065 vs. Brazil the earliest in 2035. Argentina could be a good place to invest after the crash ahead.

This is a much more complex topic when you put all of our proven indicators together, but South Asia and Southeast Asia still look best, all things considered for the next global boom… after the global crash and reset.

The content of our articles is based on what we’ve learned as financial journalists. We do not offer personalized investment advice: you should not base investment decisions solely on what you read here. It’s your money and your responsibility. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don’t trade in these markets with money you can’t afford to lose. Delray Publishing LLC expressly forbids its writers from having a financial interest in their own securities or commodities recommendations to readers.

Analysis feed

Latest Forex Analysis

Editors’ Picks

Bears ignore Aussie holidays, cheer coronavirus news at fresh multi-week low near 0.6815

AUD/USD drops to 0.6814, with an intra-day low of 0.6811, during the early Monday morning in Asia. The fears of China’s coronavirus outbreak are dominating the market’s risk sentiment off-late.

AUD/USD News

USD/JPY: Coronavirus bearish gap breaks below 109

USD/JPY has dropped heavily in the open, breaking below the 109 handle to print a fresh low of 108.88 as traders prepare for a risk-off week when considering the implications of the Coronavirus. 

USD/JPY News

Are you anxious about Coronavirus? Well, so are the markets

There's so much we don't know about Coronavirus, which increases the level of concern from public health officials, you & I as well as the markets and we can expect a risk-off start to the week ahead of a pretty major schedule.

Read more

WTI: Bears pile in on Coronavirus and ME threats

WTI is starting out the day on the offer, opening in a bearish gap and extending the bear trend to a low of $52.19 and lowest levels since October. Global growth and risk-off themes are affecting the price.

Oil News

GBP/USD: 50-day SMA, 61.8% Fibonacci question sellers

Cable stays weak while declining to the intra-day low of 1.3068 by the press time of Monday’s Asian session. The pair registers 3 days losing streak while also forming a lower high pattern if observed its moves from Dec 2019 top.

GBP/USD News

Forex Majors

Cryptocurrencies

Signatures