Global M2 effect on Gold

Money supply growth leads to debt and paper market growth, and eventually the hard stuff catches up in value.

What is M2? 

M2 is a measure of the money supply that includes cash, checking deposits, and other types of deposits that are readily convertible to cash, such as CDs.

Global money growth (M2) converted to US dollar terms, represents the world money supply that can be converted into US dollars and be used for trade and GDP growth. It is the grease that allows the market wheels to turn. Yes, there is a lag between the creation of M2 and its effect on the markets, but the charts below show that new global M2 tends to have an effect on gold and silver. 

When deflation pressures are strong more M2 is created, when inflation is hot M2 is reduced. 


Chart 1 - Global M2 to June 2023

Chart 2 - Global M2 lows on Gold and Silver

Chart 3 - China has a deflation problem. China needs global M2 to grow. Makes you wonder why 101 year old Henry Kissinger and Yellen visited China recently in 2023 H1.

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Crude Oil near $300 plus

If the crude oil price follows its performance of the last 100 years, then a print of $300 plus oil in US dollar terms is on the table in the next decade.


Of course, crude oil priced in US dollars means higher oil prices can be the result of bearish US dollar fundamentals more so than a bullish crude oil fundamentals.

Pulling commercial (light sweet) oil out of the ground can be classified into two groups: easy and hard. Easy is cheap oil production; hard is expensive oil production. The world has enjoyed cheap oil production for decades, and we are now moving into expensive oil production.

Buy the deep corrections are to be considered over the next decade.


Chart 1 - This tweet makes a point, plus it highlights the debate around future oil production. 

Chart 2 - Oil history and price channel forecasts

Chart 3 - Oil long term cycle

Chart 4 - No wonder central banks are buying all that gold. Gold follows oil.

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Bitcoin Time Map

Bitcoin has regularity with calendar day time cycles.


Chart 1 - Simple and true.

Chart 2 - Credit to TradingView. Similar sync.

It is only a matter of time. Some fundamentals.

More BRRRR in 2025 or maybe earlier as the FED has to sell $1.85 trillion of new US Treasuries in 2023 H2. Debt and energy inflation may bring BRRRR forward. Of course if there are massive spending cuts by US congress to reduce debt and inflation that would change the game. Doubt it, US is going into Argentina style fiscal dominance. 

NOTE: Fiscal dominance is when monetary policy is used to manage a countries solvency rather than unemployment or inflation targets. Hence inflation and unemployment levels are sacrificed for the protection of the bond market.

Chart 3 - More BRRRRR to come. 

Chart 4 - BTC is very cyclical.

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