In all charts, money stock values come from the St. Louis Fed. Gold stocks come from the Gold Council and gold prices from Kitco. These comparisons are for US money stock vs. World gold supply.
All charts start from a number greater than zero to better show monthly changes.
M2/World Gold Supply (oz) in 2009
MZM/World Gold Supply (oz) in 2009
M2/Gold Price in 2009
MZM/Gold Price in 2009
In October, both M2 and MZM broke a four month trend and started to rise. The additional money created by the Fed to purchase Treasuries and Agency MBS has helped fuel a powerful stock market and precious metals rally. I expected more negative news in October.
Looking at the money supply to price ratios, it is the most expensive time in 2009 to buy gold. Roughly historical years for M2/price would be 1973 and 1985.
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