Gold has to be the most studied, argued about, romantic, researched and obsessed about asset in the history of mankind. Industries revolve around it. Its price is quoted in the media every day. It used to be the basis upon which all finance was built. It still occupies a position of power and influence in our financial markets and collective consciousness.

That being said, I don’t want to spend hours re-creating the tremendous amount of research that is being continuously done on the asset and sector. It is fun to read but honestly a google search and a good book or two will be more useful to you than reading my prose.

I do however, think a picture is worth a thousand words, and I do believe in keeping it simple……so I present to you the 1) The 5 year gold price (Blue Line), 2) The 5 year M2 Money Supply in the US (Green Line – the total value of liquid and semi liquid US Cash and US cash denominated assets principally owned by households) and 3) The 100 week moving average of the price of Gold (Orange Line).

Now I know data and charts can be interpreted in a variety of ways……but lets be honest, shall we? The more money that is printed / created by the US (Green Line) , the higher the price of gold (Blue Line) goes, and if you smooth out the price volatility with a 100 week average, its a very tight correlation.

And here’s the deal: In 2020 the M2 money supply was increased from approx 15 TRILLION to 19 TRILLION dollars….a 26% increase in one year. 54% over the past 5 years.

Don’t believe me? Check it out: https://fred.stlouisfed.org/series/M2. Said another way……over 20% of US money currently in circulation was created by the government in the past 12 months. And there is more coming. Faster than ever. For a long time.

This is what is keeping the economy from Collapsing. Full Stop.

In really simple terms…..Money that is created and put in peoples / businesses hands needs to find a home. As a result, many assets, specifically ‘hard / real’ assets or those in limited supply with some tangible / utilization value, go up in price. It is the basic law of supply and demand.

I admit – Historically the correlation between money supply and gold prices does not always hold up, especially over shorter time durations. However, if it looks like a duck and quacks like a duck…..let agree its a duck. At least for now.

The only way forward for the US and major world economies is to continue to print and distribute cash. I’m betting Gold, among other things, will continue be a major beneficiary over the next 10 years.

There are other fundamental reasons to think Gold is an excellent long term investment. The hedge against inflation thesis. The store of value thesis. The portfolio diversification rationale. The hedge against the systemic devaluation of fiat currency thesis. The end of the world thesis. Pick your Thesis!

So, yes. I’m a gold bug. A wierd little bug as I’m buying early stage highly speculative microcaps that don’t even act like gold stocks. But, if gold continues an ascent….and these companies get the results they are after……Things get super interesting in the DTM5 for reasons other than just Crypto.