US currency’s time is running out.
I realize this post is quite obvious to nearly everyone here but I’m going to put these out there anyway as a reminder how precarious I believe things are.
Looking at the chart below, note how far beyond peak currency saturation we are – at least as far as currency growth which results in ‘productivity’ is concerned, as evidenced by the velocity of M2 compared to “asset” (S&P) value which have diverged since 4/2011. Velocity here is GDP (as a measure of productivity) divided by M2 (currency) w/ recessions shaded.
interactive chart
https://www.crystalbull.com/stock-market-timing/Velocity-Of-Money-chart/M2/
Ref. rate charts below:
Over the last century the Fed policy has progressively sought to replaced Business Cycle Volatility (immediately apparent to the masses on metal standard) with Currency Volatility (masked via inflation over time) ** . Coinage/notes (silver) to coinage (zinc) notes (fiat paper) and now air – aka ether(ium). Someday soon the trendlines below will break in an effort to quash currency looking for a home in value (goods read inflation, or stagflation doesn’t matter) – Of course there is always NIRP but that won’t be helpful toward maintaining global reserve currency status. Either way I believe we will be revisited with Currency Volatility nearly 50 years since the last event, it will be big.
Price of currency Fed is in control of…
approaching the crisis-line at O, but what then? NIRP appears to be a non-option. The upper trend line is not coincidental, it is the line above which CB’s lose control. ie. to keep faith sustained in the USD the price of it cannot exceed these points. Personally I’d interpret it as natural proof that there is NO FREE LUNCH.
…and to a lesser degree… (trendline broken?)
… and to an even lesser degree (no zero on Y axis – an impossibility? trendline breached?).
Parabolic Chuck, your post got me thinking, hence this post and for your sake I hope your right that the downward trend will continue until you’re able settle on your home, GL!
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As an aside, note the spreading frequency (peak-to-peak over time) and amplitude (peak-to-trough over time) after US went off gold standard in the 70’s **. Nature having it’s way.
US Unemployment Rate.
http://www.macrotrends.net/1316/us-national-unemployment-rate
Lol. Thanks for the shout out and he hope!
Does look ominous but I think they’re gonna patch her together for 6 more years. Have to create even bigger bubbles! Haha.
Oh, and great post! Lots to think about there…