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Revolutionizing Money Supply Management in the Modern Economy

If you have been keeping up with Split Velocity, at this point you should understand that accounting negligence and malpractice which fails to distinguish between gains in GDP [at the macro level] and or Annual Total Revenue (ATR) [at the micro level] over time and the point in time losses created by financial architecture misinforms how Central Banks and Federal Reserve Banks manage money supply. They do not provide the point in time increases in money supply required to counter losses in the CFI. This accounting negligence forces businesses and institutions to mark up products or use cost plus pricing due to the fact that they are attempting to increase money supply to remain profitable, a practice that drives creeping inflation world wide. It forces economies to subsist on mark ups where growth ranges on average from 0% – 6%. Instead of 100% of the waste being recovered from the CFI must be restored to business and institutions. This accounting negligence and malpractice leads to business losing 100% of their ATR to the CFI for absolutely no relevant reason. Advisory and consulting services institutions and individuals have failed to advise companies and governments about this ongoing problem, instead they manage and remain fixated on subsistence gains from 0%-6% growth while remaining completely blind to 100% losses in the CFI. This negligence is the reason why scarcity remains high across the world and poverty remains unmanageable. These ATR losses must be restored to businesses and we designed the fintech with which to do this and correct this problem, namely, Split Velocity.

In an era where central banks continue to amass gold reserves amid geopolitical tensions and economic uncertainties, a paradigm shift is overdue. As of September 2025, global central banks are on track to purchase around 800–1,000 tonnes of gold this year, down slightly from the record 1,086 tonnes in 2024, yet still representing trillions in tied-up capital due to inadequate advisory services. Nations like China have extended their gold-buying streak to nine consecutive months, underscoring gold’s enduring appeal as a safe haven. However, this reliance on physical assets overlooks a more efficient, digital alternative: the Split Velocity (SV) model, grounded in the Punabantu Equation of Exchange. Developed by business management specialist Siize Punabantu, SV promises to transform monetary policy by enabling exponential economic growth without inflation, making the demand for gold greater than that driven by central banks. This article argues that SV not only outperforms gold in stabilizing money supply but also unlocks unprecedented productivity, urging central banks to rethink their strategies.

The Enduring Allure—and Shortcomings—of Gold Reserves

Gold has long been a cornerstone of central bank reserves, with global holdings exceeding 36,000 tonnes valued at over $3 trillion. In 2025, surveys reveal that 95% of central banks anticipate rising gold reserves in the coming year, driven by its perceived roles as an inflation hedge, geopolitical safeguard, and strategic asset. Proponents argue that gold diversifies portfolios, counters currency devaluation, and signals financial sovereignty—especially amid de-dollarization trends in emerging markets.

Yet, gold’s limitations are glaring. Purchases incur massive upfront costs, with central banks adding 244 tonnes in Q1 2025 alone at prices averaging around $2,500 per ounce (escalating to $3,675 by Q4 projections). Once acquired, gold sits idle in vaults, demanding ongoing expenses for storage, 24/7 security, purity audits, and insurance—running into millions annually per institution. Price volatility poses risks; a supply surge from mining could dilute value, while declines (as seen in 2013’s 20% drop) erode reserve strength and weaken national currencies.

Moreover, gold offers passive protection at best. It failed to prevent or mitigate the 2007–2009 subprime crisis, where reserves remained untouched amid economic collapse. Central bank gold buying, accounting for 20–25% of global demand, artificially inflates prices but stifles broader market growth by diverting resources from productive investments. Opportunity costs are staggering: Funds locked in U.S. gold reserves (valued at ~$500 billion) could instead address infrastructure deficits, hunger affecting 44 million Americans, or unemployment programs.

In essence, gold perpetuates a reactive, resource-intensive approach to money supply management, rooted in outdated models like the traditional Circular Flow of Income (CFI), which overlook systemic inefficiencies leading to inflation and stagnation.

Introducing Split Velocity: A Dynamic Alternative Powered by the Punabantu Equation

Enter Split Velocity, an innovative economic framework that addresses these flaws head-on. At its core is the Punabantu Equation of Exchange, a refinement of Irving Fisher’s classic MV = PT (where M is money supply, V is velocity, P is price level, and T is transactions). The Punabantu version, KV(MS/E) = PYR, introduces key components: R (operating system, representing transactions per cycle), S (emoney multiplier for balance restoration), E (emoney constrictor for efficiency), and K (virtual velocity from splitting).

Unlike Fisher’s equation, which assumes a linear economy prone to zero growth and treats velocity as aggregate, Punabantu’s model splits velocity into dual streams—capital (productivity-focused) and household (consumption-focused). This “split” allows money to perform multiple roles simultaneously per cycle (e.g., R=2), effectively doubling output along the Production Possibility Frontier (PPF) without price hikes. For instance, in a $300 billion economy, SV shrinks apparent money supply (M/E) while boosting virtual velocity (K), resulting in doubled GDP at constant prices.

The benefits are profound: SV creates a “price plane” where sellers lack incentives to inflate costs, enabling money supply to double annually tied to real productivity gains. Empirical tests, replicable using public GDP data, reveal 100% annual CFI losses recoverable through SV, projecting growth rates exceeding 15% without inflation, poverty, or recession. By advancing or boosting GDP by as much as 0%–100% per annum—recovering the full spectrum of CFI inefficiencies—SV fosters an environment of rapid economic expansion. Implementation is digital and cost-effective, leveraging electronic money creation at near-zero marginal expense—no vaults, no audits, no physical risks.

Head-to-Head: How Split Velocity Outperforms Gold

SV’s superiority over gold is evident across key dimensions of money supply integrity:

• Inflation Control: Gold hedges against inflation but cannot prevent it. SV’s price plane eliminates inflation proactively by balancing money supply with output, making fiat more stable than gold (where supply doublings erode value).
• Crisis Resilience: Gold provides passive sovereignty but proved ineffective in crises like 2007. SV accelerates growth during shocks, injecting funds into productive splits to boost employment and output, countering recessions dynamically.
• Cost and Efficiency: Gold’s high acquisition and maintenance costs drain resources. SV operates electronically, freeing capital for infrastructure and social programs while unlocking exponential growth.
• Market Impact: Central bank gold purchases artificially support demand but stunt organic growth. SV enhances purchasing power, naturally surging private gold demand (e.g., jewelry in booming economies) beyond what banks can buy, benefiting miners sustainably. Crucially, SV’s capacity to boost GDP by 0%–100% per annum amplifies this effect dramatically. For example, elevating an economy’s growth rate from 6% to 36%—achievable through SV’s velocity splits and CFI recovery—would increase per capita income and disposable wealth, driving demand for gold as a luxury or investment asset in far greater quantities than central bank purchases. Historical precedents, like China’s high-growth periods in the 2000s–2010s, show how rapid expansion correlates with jewelry demand spikes exceeding 1,000 tonnes annually, dwarfing current CB buys of ~800–1,000 tonnes.
• Overall Stability: While gold is volatile and idle, SV transforms fiat into a durable store of value, doubling money supply at constant prices via the Punabantu Equation.

In short, SV addresses the root CFI defects that mislead central banks into gold dependency, offering a proactive, scalable solution.

Implications for Central Banks and the Path Forward

Adopting SV could redefine monetary policy, but resistance stems from entrenched practices. Accountants and advisors, bound by professional standards, risk negligence by ignoring SV’s empirical evidence in favor of gold—potentially actionable under frameworks like the U.S. Federal Reserve Act or EU’s Treaty on the Functioning of the European Union. As surveys show increasing active gold management (up to 44% in 2025), it’s time for pilots of SV technology to demonstrate its potential.

In conclusion, while gold has served economies well historically, Split Velocity represents the future: efficient, inflation-proof, and growth-oriented. Central banks must embrace this innovation to foster resilient, equitable prosperity—before another crisis exposes gold’s limitations once more. A balance needs to be struck between an effective tool like Split Velocity and gold purchase where the advantages of both are used to leverage and manage money supply.

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Abstract

This paper introduces the Split Velocity model as a transformative approach to economic systems, addressing the inefficiencies inherent in the traditional Circular Flow of Income (CFI). By achieving 100% recovery of losses within the CFI, the Split Velocity model establishes a lossless economy characterized by a baseline 1:1 return on investment over a one-year period. This contrasts sharply with the current zero-growth economy, where baseline returns are effectively 1:0, leading to reliance on cost-plus pricing, creeping inflation, and heightened financial risk. Through theoretical analysis, the paper demonstrates how the Split Velocity model balances money supply with productivity, creates price stability via a “price plane,” reduces inflation, lowers investment risk, enhances returns, and accelerates economic growth. The model fosters a well-oiled economic machine where productivity booms are matched by sustained demand, making it superior to the inflation-prone, inefficient status quo.

Introduction

The concept of the time value of money (TVM) is fundamental to financial decision-making, encapsulating the idea that a dollar available today is worth more than the same dollar in the future due to its potential earning capacity. In practical terms, TVM prompts the question: If an investor has one dollar to allocate from day one over a 365-day period (one year), where should it be invested to maximize percentage gain? Traditional options range from low-risk assets like treasury bills or government bonds to higher-risk instruments such as stocks or cryptocurrencies like Bitcoin.

However, the current economic framework, built on a flawed Circular Flow of Income (CFI), often results in a zero-growth baseline where the expected return on that dollar is zero (1:0). Businesses counteract this through markups or cost-plus pricing, which induces minimal GDP growth but perpetuates inefficiencies, inflation, and risk. This paper proposes the Split Velocity model as a superior alternative. By fully recovering losses in the CFI, the model creates a lossless economy with a baseline return of 1:1, meaning a one-dollar investment yields one dollar in return by year’s end. This shift not only minimizes risk and inflation but also amplifies returns and economic growth, offering a more efficient system for governments, businesses, and individuals.

The Flawed Circular Flow of Income and the Zero-Growth Economy

The traditional CFI model depicts the economy as a cycle where households provide factors of production to businesses, receiving income in return, which is then spent on goods and services. However, inherent flaws in this model lead to withdrawals (e.g., savings, taxes, imports) that disrupt the flow, creating losses that manifest as economic stagnation.

In a zero-growth economy, the baseline TVM is 1:0: a dollar invested over one year yields no net gain due to these systemic losses. To mitigate this, businesses employ cost-plus pricing, adding markups to cover costs and generate profits. While this strategy induces slight GDP increases, the gains are largely subsistence-level, reliant on marginal economic expansion. For instance, at the microeconomic level, individual investors might achieve 26% returns in cryptocurrencies, yet the macroeconomy may only grow by 6% annually.

Cost-plus pricing exacerbates inflation. When businesses markup prices, they effectively demand money that does not yet exist in the economy. Consider a simplified example: an economy with $10 in circulation and one mango. If a business prices the mango at $13 to secure a $3 profit, the additional $3 must be supplied by the central bank. This increases the money supply without a corresponding rise in productivity, resulting in creeping inflation. Central banks, compelled to expand the money supply to facilitate transactions, further fuel this cycle. Inflation, in turn, elevates financial risk, deterring investment and perpetuating inefficiency.

The current system thus traps economies in a quagmire of high risk, low returns, and inflation proneness. Governments, businesses, and individuals operate in an environment where productivity is mismatched with demand, and economic growth is stifled by these structural deficiencies.

Introducing the Split Velocity Model

The Split Velocity model addresses the CFI’s shortcomings by applying a mechanism that achieves 100% recovery of losses, effectively splitting and optimizing the velocity of money flows. This creates a lossless economy, where the baseline return on a one-dollar investment over one year is 1:1—representing zero net loss and full preservation of value.

At its core, the model ensures that businesses can invest in capital without subtractions from households, while household purchasing power remains intact. This dual preservation eliminates withdrawals that plague the traditional CFI, leading to a harmonious balance between supply and demand.

A key innovation is the establishment of a “price plane,” where businesses set prices without strong incentives for changes. In this framework, a business can achieve up to 100% profit at a stable price point, obviating the need for markups or cost-plus pricing. The price plane arises because the model aligns money supply precisely with productivity gains, preventing artificial inflation.

Benefits of the Split Velocity Model

Lower Inflation and Price Stability

Unlike the current system, where cost-plus pricing necessitates money supply expansions, the Split Velocity model synchronizes monetary growth with real productivity. This resistance to inflation stems from the elimination of needless markups: businesses recover total revenue lost to CFI flaws, allowing profitable operations at fixed prices. Creeping inflation is curtailed, as central banks no longer need to inject unbacked currency to bridge pricing gaps. The resulting price stability reduces uncertainty, fostering a predictable economic environment.

Reduced Financial Risk

Inflation inherently amplifies risk by eroding purchasing power and complicating investment forecasting. The Split Velocity model’s inflation resistance thus lowers overall financial risk. With a baseline 1:1 yield, investments become safer across asset classes—from treasury bills and government bonds to stocks and cryptocurrencies. The absence of CFI-induced losses means capital investments face no unwarranted subtractions, making the model the safest and least risky financial asset class available.

Higher Returns

The baseline 1:1 return sets a floor for investment yields, but the model’s potential for exceeding this is substantial. Businesses thrive on restored revenues, driving productivity booms. Since household consumption is not compromised, effective demand matches this increased output, creating a virtuous cycle. Investors are drawn to opportunities where a one-dollar input can reliably yield one dollar or more, enhancing attractiveness across markets. This contrasts with the zero-growth baseline, where returns are capped by minimal GDP increments.

Accelerated Economic Growth

By functioning as a “well-oiled machine,” the Split Velocity model accelerates growth through unchecked productivity and sustained demand. No longer hindered by inflation or CFI losses, economies experience rapid expansion. Commercial interest surges, as lower risk and higher baseline yields encourage investments in stocks, bonds, and even riskier assets like crypto. The model’s lossless nature ensures that growth is not subsistence-based but exponential, far surpassing the 6% macro growth seen in inflationary environments.

Comparative Analysis: Split Velocity vs. Current Economy

Aspect	Current Zero-Growth Economy	Split Velocity Model
Baseline Return	1:0 (zero net gain)	1:1 (full preservation and potential for more)
Inflation Mechanism	Cost-plus pricing drives money supply increases	Balances money supply with productivity; price plane stability
Risk Level	High due to inflation and CFI losses	Low; inflation-resistant and lossless
Returns	Subsistence gains tied to tiny GDP growth	High baseline with strong upside potential
Economic Growth	Stagnant, inefficient, inflation-prone	Accelerated, productive, demand-matched
Investment Appeal	Deterred by risk and low yields	Enhanced by safety and lucrativeness

The table illustrates the stark superiority of the Split Velocity model. In the current system, inefficiencies force reliance on inflationary tactics, yielding a high-risk, low-growth trap. The Split Velocity alternative eliminates these pitfalls, promoting a efficient, growth-oriented economy.

Addressing Malpractice in Managerial Finance and the Imperative for Reform

A critical oversight in managerial finance lies in its malpractice and negligence, particularly the inability to distinguish gains accrued over time from losses incurred at any instantaneous point, as reflected in GDP and Total Revenue (TR) metrics. This accounting flaw has profoundly skewed global economic practices, steering humanity toward pervasive poverty, artificial scarcity, and immense suffering and strife by perpetuating inefficient resource allocation and systemic imbalances. Professional advisory firms, which guide key stakeholders including governments, Congress, Parliament, businesses, shareholders, investors, and the general public, bear responsibility for this negligence and must address it forthwith through rigorous reforms in financial reporting and analysis. The Split Velocity test demonstrates empirical validity through its application to real-world economies, such as the US, revealing imbalances between household consumption and capital investment that align with observed economic distress; it is admissible under established economic laws like the Quantity Theory of Money and principles of monetary velocity, as well as international accounting standards that emphasize accurate temporal valuation. Every effort must be made to rectify this issue, restoring TR to businesses and cultivating an economy with diminished risk, negligible inflation, and elevated performance in stock markets and other financial instruments, thereby delivering substantially greater returns for investors.

Conclusion

Advancing to a Split Velocity model represents a paradigm shift from the flawed, inflation-prone zero-growth economy to a lossless system of lower risk, higher returns, reduced inflation, and accelerated growth. By recovering CFI losses and establishing a price plane, the model ensures balanced money flows, booming productivity, and matched demand. Governments, Congress, Parliament, businesses, and individuals stand to benefit immensely, operating in an environment where the time value of money is maximized safely and lucratively. Future research could explore empirical implementations, but the theoretical advantages outlined here underscore the model’s potential to revolutionize economic structures.