I suggest then that increased velocity is actually merely an indicator of the increased ability of businesses to pay their overheads and hence make more profit, that a decreasing rate is thus simply an indicator of increased inability of businesses to pay overheads making profitability harder and that the long 45-50 year downward trend of velocity is likely an indicator of the increased deregulation of Banking which started in the Reagan Administration leading to the enlargement of the entire financial “industry” which translates into increased  premature cancellation of money and the increased pooling of profits and savings, i.e. rent seeking, increased existence of bond funds and the bond market itself (primarily participated in by the very wealthy, but also by “the middle class” via pensions etc.) both of which tend to exacerbate the extraction of money problem as a whole.

Now having said this, what is the Discount mechanism, aside from its obvious price deflationary effects and consequent increase in consumer purchasing power, but (due to its being rebated back to participating merchants) an increase in velocity/in other words much more money re-circulating that businesses can and do utilize for paying their overheads and hence increasing their profits…and also both a damper on the premature cancellation of money going back to the Banks and an overall downsizing of the consumer finance market as well which translates directly into a decrease in the costs of production due to interest charges?

Finally, if the Discount is a macro-economic tool, does it not catch all costs over and above the costs of consumption for the period, and hence be a much larger percentage than just what economists compute as the CPI, consumer price index (which is probably a conservative and hence faulty indicator anyway) and thus it would decrease prices and increase individual buying power much more than simply the 2.5-3% inflation rate associated with “good economic times”?