How Tech Dominates and Dollars Depreciate

Tech versus the S&P500, gold, and monetary expansion

Percent Growth: CPI, M2 (Broad Money), S&P500 & GOLD

• Both the S&P 500 and gold have seen remarkable long-term growth (nearly 7,000% since the early 1970s).
• The stock market is seemingly more volatile. While gold has periodically stagnated with frenetic and rapid spikes thereafter.
• Surprisingly, gold has slightly outperformed stocks over this 50-year timeframe. But also, timing matters! And so do stock dividends.
• Consumer Price Indices show continuous devaluation of dollar purchasing power. Yet the S&P 500 and gold have significantly outperformed CPI over decades.

Reading between the bulleted lines… Are the S&P500 and gold leading or lagging indicators for money itself? These charts appear to show near-exponential money supply in 2020 as the Fed rushed to print dollars and buy bonds (like began during the Great Financial Crisis).

Tech has surged especially.

Percent Growth: CPI, M2 (Broad Money), S&P500, GOLD, & Tech (QQQ)

What will the macroeconomic future bring? It’s inherently unpredictable, yet history seems to rhyme. It’s probably only a matter of time until the money printer turns…