UNDERSTAND MACRO-FINANCE!
WHILE ALL PRICES HAVE RISEN SINCE 1913 (THE CREATION OF THE FEDERAL RESERVE), SOME HAVE DONE SO MORE THAN OTHERS!
THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )!
WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S!
THE ONLY WAY TO DETERMINE IF M3 IS RISING OR FALLING IS BY LOOKING AT THE PRICE OF OIL , THE PRICE OF THE 1-MONTH TREASURY BILL AND THE YIELD CURVE, ALL OF WHICH INDICATE THERE WAS A DEFLATIONARY PERIOD AT THE BEGINNING OF 2020!
STOCKS, WHICH ARE THE MOST FINANCIALIZED ASSET CLASS, HAVE SEEN THE GREATEST INCREASE IN PRICE, BECAUSE MUCH OF THE CREDIT THAT THE FINANCIAL SYSTEM CREATES BIDS UP THEIR PRICE BEFORE ANYTHING ELSE!
COPPER AND OIL , THE PRICES OF WHICH ARE MUCH MORE IMPACTED BY SUPPLY AND DEMAND CONDITIONS WITHIN THE REAL ECONOMY, HAVE BARELY MOVED IN COMPARISON AND REFLECT THE LACK OF REAL ECONOMIC GROWTH FOR THE PAST HALF CENTURY!
GOLD , FOR ANYONE WHO CONSIDERS ITS PRICE EVEN REMOTELY ELEVATED, HAS BARELY EVEN KEPT UP WITH THE INCREASE IN M2 (WHICH INCLUDES PHYSICAL CURRENCY, CHEQUING ACCOUNTS AND SOME SAVINGS ACCOUNTS).
THROUGHOUT HISTORY, THE MARKET CAPITALIZATION OF GOLD HAS ALWAYS EVENTUALLY MATCHED THE TOTAL MONEY SUPPLY, AND THEREFORE THE PRICE OF GOLD MUST INCREASE BY SEVERAL TIMES EVEN FROM HERE TO BE VALUED CORRECTLY!
THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )!
WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S!
THE ONLY WAY TO DETERMINE IF M3 IS RISING OR FALLING IS BY LOOKING AT THE PRICE OF OIL , THE PRICE OF THE 1-MONTH TREASURY BILL AND THE YIELD CURVE, ALL OF WHICH INDICATE THERE WAS A DEFLATIONARY PERIOD AT THE BEGINNING OF 2020!
STOCKS, WHICH ARE THE MOST FINANCIALIZED ASSET CLASS, HAVE SEEN THE GREATEST INCREASE IN PRICE, BECAUSE MUCH OF THE CREDIT THAT THE FINANCIAL SYSTEM CREATES BIDS UP THEIR PRICE BEFORE ANYTHING ELSE!
COPPER AND OIL , THE PRICES OF WHICH ARE MUCH MORE IMPACTED BY SUPPLY AND DEMAND CONDITIONS WITHIN THE REAL ECONOMY, HAVE BARELY MOVED IN COMPARISON AND REFLECT THE LACK OF REAL ECONOMIC GROWTH FOR THE PAST HALF CENTURY!
GOLD , FOR ANYONE WHO CONSIDERS ITS PRICE EVEN REMOTELY ELEVATED, HAS BARELY EVEN KEPT UP WITH THE INCREASE IN M2 (WHICH INCLUDES PHYSICAL CURRENCY, CHEQUING ACCOUNTS AND SOME SAVINGS ACCOUNTS).
THROUGHOUT HISTORY, THE MARKET CAPITALIZATION OF GOLD HAS ALWAYS EVENTUALLY MATCHED THE TOTAL MONEY SUPPLY, AND THEREFORE THE PRICE OF GOLD MUST INCREASE BY SEVERAL TIMES EVEN FROM HERE TO BE VALUED CORRECTLY!
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