Money supply growth leads to debt and paper market growth, and eventually, the hard stuff catches up in value.

What is M2?

M2 is a measure of the money supply that includes cash, checking deposits, and other types of deposits that are readily convertible to cash, such as CDs.

Global money growth (M2) converted to US dollar terms, represents the world money supply that can be converted into US dollars and be used for trade and GDP growth. It is the grease that allows the market wheels to turn. Yes, there is a lag between the creation of M2 and its effect on the markets, but the charts below show that new global M2 tends to have an effect on gold and silver. 

When deflation pressures are strong more M2 is created, when inflation is hot M2 is reduced. 

Chart 1 - Global M2 to June 2023

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Chart 2 - Global M2 lows on Gold and Silver

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Chart 3 - China has a deflation problem. China needs global M2 to grow. Makes you wonder why 101-year-old Henry Kissinger and Yellen visited China recently in 2023 H1.

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