The Money Supply Vs. Inflation historical chart below can save your family if you follow its revelation.
The “M2 Money Supply”, also referred to as “M2 Money Stock“, is a measure for the amount of currency in circulation.
M2 includes M1 (physical cash and checkable deposits) as well as “less liquid money”, such as saving bank accounts.
The chart below plots the yearly M2 Growth Rate and the Inflation Rate, which is defined as the yearly change in the Consumer Price Index (CPI).
When inflation is high, prices for goods and services rise, and thus the purchasing power per unit of currency decreases.
Historically, M2 has grown along with the economy (see in the chart below). However, it has also grown along with Federal Debt to GDP in times of war.
In most recent history, M2 growth surpassed 10 percent in recessions, during which an expansionary monetary policy was deployed by the central bank, including large scale asset purchases. According to Bannister and Forward (2002, page 28), Money supply growth and inflation are inexorably linked.
The chart below is that of the M2 Money Supply Vs. Inflation:
The chart above is telling you what is coming very soon.
Inflation is tied to the money supply and every single period of time that the money supply expanded, inflation soon followed with a market crash.
Now, when you look at the current money supply, on the far right, you can clearly see that it has exploded beyond reason just within the last few years. This is leading to a MASSIVE MARKET CRASH followed by RAPID INFLATION.
However, you have time still to prepare. As of today, inflation has not yet started but it will come soon.
Do you know which assets you should own, hedge, or sell immediately?
As the Money Supply Vs. inflation adjustment appears we will tell our members precisely what assets to buy, keep, and sell within the Members Blog.
Market Cap to GDP Ratio is a long-term valuation indicator for stocks. It has become popular in recent years, thanks to Warren Buffett.
Back in 2001 he remarked in a Fortune Magazine interview that “it is probably the best single measure of where valuations stand at any given moment.”
The Wilshire 5000 Index is widely accepted as the definitive benchmark for the U.S. equity market and is intended to measure the total market capitalization of most publicly traded companies headquartered in the United States.
The chart below is that of the Wilshire 5000:
The S&P 500 to GDP Ratio
For comparison purposes, the S&P 500 to GDP ratio is shown below as well. The S&P 500 consists of 500 large US companies. Just like the Market Cap to GDP Ratio and is a capitalization-weighted index.
It captures approximately 80% of the available total market capitalization. For these reasons, it’s a much better measure for ‘market cap’ than the Dow Jones – however, the two charts look very similar.
The charts clearly illustrate that the total US Markets are well above their 2000, 2008 and although we have a bit to go, we are quickly reaching the 1929 bubble. Thus, it is safe to assume we are in Market Cap to GDP bubble territory.
Over the next few weeks, we will show you a few more charts that are a bit concerning. Our Wealth Preserver members are protected just in case the Unthinkable occurs.
The S&P 500 is the most widely cited single gauge of large-cap equities on U.S. stock exchanges. Standard & Poor’s estimates that more than $7.8 trillion is benchmarked to the index, making it one of the most influential figures in the world of finance. To be included, a company must be publicly traded in the United States and report a market capitalization of $5.3 billion or greater.
According to Mike Maloney, the S&P 500 Dividend Yield is the second-best way to measure a market value (after the Price Earnings Ratio).
The dividend yield indicates how much a company pays out in dividends each year relative to its share price. In other words, it measures how much “bang for your buck” you are getting from dividends.
In the absence of any capital gains, the dividend yield is effectively the return on investment for a stock. The lower the dividend yield, the less you get for your investment, and hence the more overvalued a stock.
The historic S&P 500 Dividend Yields were deducted by Robert Shiller and published in his book Irrational Exuberance.
As you can clearly see in the chart, The S&P 500 Dividend Yield Is Screaming and telling you that it is well into bubble territory and will eventually correct. When it does correct or crash, will you be prepared or warned, or will you just go down with the markets?
The S&P500 P/E Ratio shows whether the stock market is overvalued or undervalued. It’s not a matter which Stocks you own in your portfolio because when the P/E Ratio turns EXTREME, VIRTUALLY ALL STOCKS Crash.
The price-earnings ratio is calculated by dividing a company’s stock price by its earnings per share. In other words, the S&P500 P/E ratio shows what the market is willing to pay for a stock based on its current earnings.
Yale professor Robert Shiller, the author of Irrational Exuberance, has reintroduced this adjusted ratio to a wider audience of investors. The P/E Ratio is illustrated below and is extremely simple to understand with a quick view of the chart.
So, is it under or overvalued?
Today the P/E Ratio is sitting at 28 and is in Extreme Bubble Territory and getting higher!
All you have to understand from the chart is that since 1880,
“Every single time the S&P500 P/E Ratio rose above 20, the stock market crashed; Every Single Time!”
Expanding Socialist Authoritarianism is getting far worse by the day and it appears that our Algorithmic Cyclical Models on War & Civil Unrest are simply on target, have started, and are expanding rapidly.
India is becoming confrontational against China and oppressing its own people which appears to be in a secret agenda with the Globalist Socialism Crowd trying to isolate China and force them to surrender their sovereignty to their new world order.
What is really frightening is that the Democrats are taking on the policies advocated by Nazi-style views of Elizabeth Warren. It is one thing to read in history books about how oppressive governments became which led to World War II and to see it unfolding before our eyes.
The Socialists have created such a divide among the people this is doing monumental damage to the population turning brother against brother. In California, a woman threw a hot cup of coffee in the face of a man on the street who was not wearing a mask. This entire issue of masks and social distancing has created a mindset that being even close to anyone is dangerous. Many no longer shake hands.
The Presidential Stock Market Direction will be determined by who enters the White House. The “WHY & HOW” is clear…
The recent MMT implies that a Presidential Stock Market Direction win by Biden will prove to be a complete joke. This would be much WORSE than Jimmy Carter who inspired the collapse of confidence in the dollar and government leading to the 1980 gold high. Capital will flee public assets and shift into private.
One the other hand, the worse of the economic crisis is external to the USA became many countries like Germany depend on selling to consumers outside their own country. The likelihood of a breakup of the EU and their idea of canceling currency and moving to perpetual bonds that would even wipe out pensions in Europe will push capital outside and into the US stock market.
Keep in mind that this is a Monetary Crisis Cycle intermixed with a Sovereign Debt Crisis and this entire coronavirus nonsense has so accelerated the debt crisis that now the politicians fear what will happen if they lift the restrictions on paying rents and mortgages.
The politicians around the world have responded in such an exaggerated manner to this virus that they will NEVER admit a mistake. Thus, they must oppress the people and hence we have entered into rising authoritarianism for the next decade.
Although the US Market will have a Slingshot move will occur no matter the Presidential Stock Market Direction, US retirement shares market will follow Europe, so be prepared. Stay close to your Wealth Preserver and Maximizer Signals to prevent a potential retirement account wipeout as this election will become the most violent in our countries history, and it will continue to escalate through 2032.
Lockdown Tsunami #2 has just begun, and that is really bad news for the U.S. economy.
Lockdown Tsunami #1 resulted in the permanent closing of more than 100,000 U.S. businesses, colossal lines at food banks around the nation, and the loss of tens of millions of jobs. Needless to say, this new wave of lock-downs will make things even worse, and some are speculating that this is precisely what Democrats want.
If the U.S. economy continues to fall apart as we approach the election in November, the thinking is that this will make President Trump look bad and will make it more likely that people will cast votes for Democrats. But there is also the possibility that this could backfire in a huge way for the left. If millions of Americans start to identify the Democrats as “the party of the lock-downs”, that could actually greatly help President Trump in November.
At this point, the battle lines are becoming quite clear. President Trump and other top Republicans are strongly against more lockdowns, but Democratic politicians in many areas of the country are starting to institute them anyway. In fact, we just learned that all schools in Los Angeles, San Diego, Atlanta and Nashville will be closed at the beginning of the new school year…
“Resisting pressure from President Donald Trump, three of the nation’s largest school districts said Monday that they will begin the new school year with all students learning from home. Schools in Los Angeles, San Diego and Atlanta will begin entirely online, officials said Monday. Schools in Nashville plan to do the same, at least through Labor Day.”
Other major cities are expected to follow suit. Of course considering the quality of the education in most of our public schools, most of those kids won’t exactly be missing too much.
Ultimately, closing the schools won’t have too much of an economic impact, but shutting down most of the businesses in our largest state certainly will. On Monday, California Governor Gavin Newsom announced a comprehensive lock-down for 30 California counties which account for “about 80 percent of California’s population”…
“Newsom, a Democrat, announced during a press briefing that all bars across the state must close up shop and that restaurants, wineries, tasting rooms, family entertainment centers, zoos, museums and card rooms must suspend indoor activities.The governor also announced that all gyms, places of worship, malls, personal care services, barbershops, salons, and non-critical offices in counties on the state’s “monitoring list” had to shut down under the new order. The order affects more than 30 counties which are home to about 80 percent of California’s population.”
Newsom is a political opportunist, and I guarantee you that he wouldn’t be doing this unless he truly believed that it would help Democrats in November.
But I think that Newsom and other top Democrats have greatly underestimated how much the American people detest COVID-19 restrictions at this point. We have been witnessing a huge backlash all over the country, and even though California is far more liberal than most other states, a backlash has been brewing there as well.
If the Democrats are not very careful, they are going to lose an election that they could have very easily won.
First of all, they should have never nominated Joe Biden. It is obvious to everyone that he is physically and mentally declining at a very rapid pace, and videos of him “acting creepy” will be viewed millions upon millions of times over the coming months. Democrats have known about Biden’s creepy behavior for many years, but they decided to give the nomination to him anyway.
Secondly, most top Democrats have refused to strongly denounce the rioting, looting and violence that have happened around the nation, and this is going to push a whole lot of people toward the Republicans.
Thirdly, the backlash against these new lockdowns is going to be directed primarily toward Democrats. If Democratic politicians push too far, this will be an issue that deeply hurts them in November.
But despite all of these mistakes, it is possible that the Democrats could still come out on top, because Trump and the Republicans are making lots of political mistakes as well.
If Trump wants to make a comeback in the polls, he really needs to fully embrace an anti-lock-down message, because that would strongly resonate with tens of millions of voters.
The first wave of lockdowns certainly didn’t stop the spread of the virus, and more lockdowns will not stop it from spreading either. And now three separate scientific studies have shown that COVID-19 antibodies disappear very, very rapidly, and that means that a vaccine is not going to end this crisis and we will never reach a point of “herd immunity”. So we are going to have to find a way to function effectively as this virus circulates around the globe year after year, because it isn’t going to go away.
We simply cannot shut down the economy every time the number of cases starts to surge again. The damage that we have already done to the U.S. economy has been incalculable, and now these new lockdowns will do even more damage.
“Let me be blunt, too many countries are headed in the wrong direction, the virus remains public enemy number one,” WHO Director General Tedros Adhanom Ghebreyesus told a virtual briefing from the U.N. agency’s headquarters in Geneva. “If basics are not followed, the only way this pandemic is going to go – it is going to get worse and worse and worse.”
What would the WHO have us do?
Would they like us to all lock ourselves in our homes indefinitely?
The WHO keeps touting a future vaccine, but if COVID-19 antibodies disappear after just a few months, there is no way that a vaccine is going to end this pandemic.
And many Americans will never, ever take any COVID-19 vaccine under any circumstances.
As I discussed in an article that I posted earlier, it looks like we are just going to have to accept the fact that COVID-19 is going to be around year after year.
It is easy for the “experts” to tell us that everyone should just stay home, but the price tag for the first wave of lockdowns was astronomical. Thanks to all of the emergency measures that Congress passed, the U.S. government ran a budget deficit of 864 billion dollars in the month of June…
The US budget deficit surged to a record-breaking $864 billion in June, the Treasury Department said on Monday. The increase is the product of the federal government’s efforts to combat the corona-virus pandemic and its economic fallout. The government collected about $240 billion in tax revenue in June, the Treasury said, and federal spending overall reached $1.1 trillion.
To put that in perspective, it took from the founding of our nation until 1980 for the U.S. government to accumulate a total of 864 billion dollars of debt.
And now we have added that much to the national debt in just one month.
We simply cannot keep doing this.
No matter what we do, COVID-19 is going to keep spreading, and we are going to have to learn how to deal with this virus for a very long time to come.
Lockdown Tsunami #2 is definitely not the answer, but unfortunately many of our politicians are convinced otherwise. So U.S. economic conditions will continue to deteriorate, and the economic depression that began earlier this year will continue through the end of 2020 and beyond. We encourage wealth and retirement account protection immediately because when the economy turns down, your retirement account will get wiped out but you family can be safe from collapse.
When it comes to the stock market, never say never because every possible market event will happen at least once. Especially events you least expect.
Here’s one that is positive for your portfolio.
There are specific events that have been proven through over 200 years of actual stock market history.
In fact, this one is proven beyond a shadow of a doubt and you can make money with it very soon:
Up & Down Gaps Close 91% Of The Time!
For those of you who do not know what a gap is, and how important it is, here is a simple explanation.
Let’s now look at the current chart below:
As you can see, the Standard Poor’s 500 chart above reveals 3 Up Gaps in price that, at a better than 91% chance will eventually fill to the downside. The reason that pushes this to the ranks of “it will now LIKELY move sooner than later is the fact that all 3 Up Gaps occurred within 3 months and this is almost unprecedented.
Watch out below. We are not trying to scare you, quite the opposite, we are giving you a kind warning.
So lets add it up:
“A 91% chance of filling every market gap up or down for the last 200 years?”
Prepare for anything because the last time more than 3 Gaps were closed within only 5 weeks was February 2020!
What is hard to imagine is that the rise lasted 1,458 days for the 5 Up Gaps to be created between December 2016 and February 2020. It took exactly 22 Corona-Crash days to close (fill all 5) to the downside.
The point is clear. This is not a question of will the current 3 Up Gaps fill, but when will they fill and will you avoid the decline?
You must be ready to avoid the coming decline unless you have 1,458 more days to wait for it to come back to break even.
As we already demonstrated to our members on January 18, 2020 with a market Red Light exit signal, InterAnalyst will warn and protect our members when it turns down again.
“Face reality, and that means admitting that “the U.S. economy has plunged into a depression.”
This is already the worst economic downturn that America has experienced since the Great Depression of the 1930s, and we are right in the middle of the largest spike in unemployment in all of U.S. history by a very wide margin.
Of course, it was fear of COVID-19 that burst our economic bubble, and fear of this virus is going to be with us for a very long time to come. So we need to brace ourselves for an extended economic crisis, and at this point, even Time Magazine is openly referring to this new downturn as an “economic depression”.
Needless to say, there will be a tremendous amount of debate about how deep it will eventually become, but everyone should be able to agree that our nation hasn’t seen anything like this since before World War II.
In order to prove my point, let me share the following 10 numbers with you…
#1 According to a study that was just released by the National Bureau of Economic Research, more than 100,000 U.S. businesses have already permanently shut down during this pandemic, and that represents millions of jobs that are never coming back.
#2 The Federal Reserve Bank of Atlanta is now projecting that U.S. GDP will shrink by 42.8 percent during the second quarter…
“A new GDP forecast from the Federal Reserve Bank of Atlanta for the three months through June estimates an unprecedented drop of 42.8 percent. The bank describes the data as a “nowcast” or real-time, compared with the official government report of GDP, which is dated. The first-quarter preliminary data, which showed a 4.8 percent dip, included a limited period of impact from COVID-19.”
#3 On Friday we learned that U.S. retail sales were down 16.4 percent during the month of April, and that is a new all-time record.
#4 U.S. factory output was down 13.7 percent last month, and that was the worst number ever recorded for that category.
#5 U.S. industrial production fell 11.2 percent last month, and that represented the worst number in 101 years.
#6 On Thursday, we learned that the number of Americans that have filed initial claims for unemployment benefits during this pandemic has risen by another 2.9 million, and that brings the grand total for this entire crisis to 36.5 million. To put that number in perspective, at the lowest point of the Great Depression of the 1930s only about 15 million Americans were unemployed.
#7 According to the Federal Reserve Bank of Chicago, the real rate of unemployment in the U.S. is now 30.7 percent.
#8 According to a survey Fed officials just conducted, almost 40 percent of Americans with a household income of less than $40,000 a year say that they have lost a job during this crisis.
#9 One study has concluded that 42 percent of the job losses during this pandemic will end up being permanent.
#10 According to a professor of economics at Columbia University, the U.S. homeless population could rise by up to 45 percent by the end of this calendar year.
We have never seen economic numbers this horrifying, and more awful economic numbers are coming in the months ahead.
At this point, things are so bad that even Fed Chair Jerome Powell is openly admitting that he doesn’t really know how long this new economic downturn will last…
“This economy will recover…We’ll get through this. It may take a while. It may take a period of time. It could stretch through the end of next year,” Powell said during a rare televised interview that aired on “60 Minutes” Sunday night. “We really don’t know. We hope that it will be shorter than that, but no one really knows.”
In the months ahead, there are a few sectors that you will want to keep a particularly close eye on, and one of them is the commercial real estate market. The following comes from Zero Hedge…
“Fast forward to today, coronavirus outbreak, and the ensuing lockdown, has essentially frozen the commercial real estate market. Buildings that were once used for restaurants, offices, hotels, spas, and or anything else that is classified non-essential have seen soaring vacancies.
This is single handily sending the commercial property market into chaos. As vacancies soar, tremendous downward pressure is being put on almost every asset class tied to commercial real estate.
The latest TREPP remittance data compiled by Morgan Stanley showed a quarter of all commercial mortgage-backed securities (CMBS) could be on the verge of default.”
I am personally convinced that we are on the precipice of the greatest commercial real estate implosion in American history.
As the dominoes tumble, it is going to send wave after wave of devastation through the financial industry, and it is going to make the subprime mortgage meltdown of 2008 look like child’s play.
But at least bankruptcy lawyers will have plenty of work. Last week we learned that J.C. Penney filed for Chapter 11 bankruptcy protection, and of course the bankruptcies that we have seen so far will just be the tip of the iceberg.
I think that politicians all over America are going to deeply regret overreacting to COVID-19, because nobody is going to be able to put the pieces back together now that our economic bubble has burst.
Sadly, very few people understood how shaky our debt-fueled economic “boom” was, and ultimately it didn’t take that much to push us into a new economic depression.
We have seen a hefty relief rally but does Another Leg Down loom? For those who are Wealth Maximizer Pro members, you have caught the nice profitable rally, contratulations.
I am seeing some “disturbing” signs that the market is very close to re-testing the lows that we previously have made, or, will it form another leg down loom?.
At the very least, it is 98% certain we will come to test the lows around 2250 at any moment in time. It is possible that we have another final leg down, and I believe that we likely will.
It is important for you to remain patient instead of panic buying and falling into bull trap.
During this last leg down, simultaneously, Goldand Silverwill likely sell-off for liquidity reasons. People are now and will continue to liquidate their hidden savings.
Here’s why we know that the last leg down is coming:
The VIXremains incredibly elevated (60+) despite big pops in the markets and has not subsided. This tells you another sell-off is looming. Whats more, it’s supported by many other technical and fundamental factors.
For the market to continue up and ignore these factors would be unprecedented.
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