Three-Bull-Insight

Money Supply (M1) / GDP - 2M Chart

M1/GDP  
M1/GDP  
Milton Friedman's Money-Supply Rule:
Growth of the Money Supply << Rate of Growth of Real GDP = Recession
--There is not enough money to buy what has been produced.

Growth of the Money Supply >> Rate of Growth of Real GDP = Inflation
--There is an abundance of money and not enough goods - prices will rise

Growth of the Money Supply == Rate of Growth of Real GDP = Equilibrium

Bottom Line:
We are entering a severe inflationary period. Prices have increased a lot over 90 years and should be seeing this trend continue.
--Gold, Silver , Commodities , Assets will continue to increase as long as the below remains true.

--The Feds have resorted to unlimited quantitative easing to fight a deflationary spiral that would cause mass bankruptcies, unemployment, and credit/ liquidity shortages.
--Negative Interest Rates Next?

Comments

Since there is no measurable inflation, we can probably conclude that Friedman was wrong. Most likely because he assumed a stable velocity. He made the mistake of believing that bigger bank accounts mean more inflation even when no one is making purchases. To have the given price of a good increase, people have to actually be buying those goods whether or not they have the purchasing power to do so.
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Nice chart.
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This is what we needed
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Finally someone willing to talk about the Fed's terrible ideas.
Great work!
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I like your work..
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Good fundamental analysis. Like it.
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Great chart! How do I add this to my watch list? I was only able to find M1 but not the M1/GDP chart
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@welf, you need to use the mathematic operations to get it
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welf MadButcherWA
@MadButcherWA, how do you do that from tradingview? Thanks!
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@welf, You have to explicitly type "M1/GDP" you're actually dividing M1 by GDP to get the chart.
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