True Money Supply Vs Gold

Look at the chart below TMS (True Money Supply). This only suggests that longer term we will have inflationary environment rather than deflationary one.The deflation that we are seeing is nothing but debt liquidation going on every levels either private or public entities but this is good for overall economy as too much debt will create a boom bust cycles and its a pure monetary phenomenon.



Okay now look closer to the TMS chart you will see mini spikes around 1982-1984, And right after that during Clinton era when Robert rubin was treasury secretary took of from glass steagall act with massive spike in money supply till 2000 which has created a technology hype and got bust but central bankers did not stopped their drug addictive money supply after that but only quadrupled from there in bush era with massive QE's, Bailouts, Currency swaps ...etc..This did not solved the any problems in market and only gets worse as they are trying to kick the can down the road postponing the problems for future.This will only lead to massive inflationary in SOFT and Hard Commodities.

Okay now look at the multi decade gold market below.This is directly proportional to the Money Supply into the economy.It got bottomed in 2001 and right from there its rising in proportion to Money Supply, And it will keep exploding as the printing press resumes.



Long term charts on gold only suggest that we are in a linear growth rather than in parabolic one.But if feds like to go for another QE program in trillion dollar then it will take parabolic path and any dips towards the trend line is good buy but remember the grand support for gold is around $1000/ounce if this trend breaks, And it does not mean we are headed for the price collapse but temporary liquidation in gold markets like the one we have seen in Lehman collapse circle in red in the above chart